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Product Market Integration and Wages in Unionized Countries

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Author Info
Jakob Roland Munch
Jan Rose Sørensen () (Department of Economics, University of Aarhus, Denmark)

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Abstract

This paper studies the effects of product market integration on wages. We develop a two-country model of international trade with imperfectly competitive product markets and unionized labor markets. Integration is modelled as either a fall in fixed or variable trade costs. A reduction in fixed trade costs leads to an unambiguous decrease in wages, whereas a reduction in variable trade costs has an ambiguous effect on wages.

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Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 1999-14.

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Handle: RePEc:aah:aarhec:1999-14

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Web page: http://www.econ.au.dk/afn/

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Related research
Keywords: Economic integration trade unions international trade product market competition

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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  1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalization and Union Opposition to Technological Change," CEPR Discussion Papers 4836, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Jakob Munch & Jan Sørensen, 2000. "Competitiveness and Integration of Product Markets," Open Economies Review, Springer, vol. 11(4), pages 359-381, October. [Downloadable!] (restricted)
  3. Ana, MAULEON & Vincent, VANNETELBOSCH, 2005. "Market Integration and Strike Activity," Université catholique de Louvain, Département des Sciences Economiques Working Paper 2005025, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  4. Lommerud, Kjell Erik & Sørgard, Lars & Straume, Odd Rune, 2003. "National versus International Mergers in Unionised Oligopoly," CEPR Discussion Papers 4040, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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