Advanced Search
MyIDEAS: Login to save this paper or follow this series

International Trade, Union Wage Premia, and Welfare in General Equilibrium

Contents:

Author Info

  • Udo Kreickemeier
  • Frode Meland

Abstract

We study how two distinct forms of globalisation, trade cost reductions and opening up of trade in previously shielded sectors, affect sector-specific wages, employment levels and aggregate welfare in a two-country model of general oligopolistic equilibrium (GOLE) with partly unionised labour markets. We find that both forms of globalisation increase union coverage, and they also lead to a lower union wage premium in shielded sectors. In contrast, the union wage premium in open sectors and aggregate welfare are affected differently by the two types of globalisation. Trade cost reductions in open sectors always lead to higher union wage premia and to lower aggregate welfare, while an increased number of open sectors lowers the union wage premium, and it may also increase welfare.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-03/cesifo1_wp3407.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3407.

as in new window
Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:ces:ceswps:_3407

Contact details of provider:
Postal: Poschingerstrasse 5, 81679 Munich
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Email:
Web page: http://www.cesifo.de
More information through EDIRC

Related research

Keywords: globalisation; unions; non-traded goods; general oligopolistic equilibrium;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Neary, J Peter, 1987. "Determinants of the Equilibrium Real Exchange Rate," CEPR Discussion Papers, C.E.P.R. Discussion Papers 209, C.E.P.R. Discussion Papers.
  2. Frode Meland, 2006. "A Union-bashing Model of Inflation Targeting," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 108(3), pages 419-432, October.
  3. Neary, J Peter, 2004. "Cross-Border Mergers as Instruments of Comparative Advantage," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4325, C.E.P.R. Discussion Papers.
  4. Naylor, Robin, 1997. "Union Wage Strategies and International Trade," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 480, University of Warwick, Department of Economics.
  5. Bastos, Paulo & Kreickemeier, Udo, 2009. "Unions, competition and international trade in general equilibrium," Journal of International Economics, Elsevier, Elsevier, vol. 79(2), pages 238-247, November.
  6. Steinar Holden, 2002. "Wage Setting Under Different Monetary Regimes," CESifo Working Paper Series, CESifo Group Munich 632, CESifo Group Munich.
  7. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalization and Union Opposition to Technological Change," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4836, C.E.P.R. Discussion Papers.
  8. Leon Bettendorf & Hans Dewachter, 2007. "Ageing and the Relative Price of Nontradeables," Tinbergen Institute Discussion Papers, Tinbergen Institute 07-064/2, Tinbergen Institute.
  9. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 92(368), pages 825-48, December.
  10. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
  11. Paulo Bastos & Odd Rune Straume, . "Globalization, product differentiation and wage inequality," Discussion Papers 10/03, University of Nottingham, GEP.
  12. Rasmussen, Bo Sandemann, 1992. " Union Cooperation and Nontraded Goods in General Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 94(4), pages 561-79.
  13. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, Elsevier, vol. 42(7), pages 1251-1267, July.
  14. Cornes,Richard, 1992. "Duality and Modern Economics," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521336017.
  15. Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, Elsevier, vol. 24(3-4), pages 217-234, May.
  16. Lommerud, Kjell Erik & Sørgard, Lars & Straume, Odd Rune, 2003. "National versus International Mergers in Unionised Oligopoly," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4040, C.E.P.R. Discussion Papers.
  17. Kjell Erik Lommerud & Frode Meland & Lars S¯rgard, 2003. "Unionised Oligopoly, Trade Liberalisation and Location Choice," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(490), pages 782-800, October.
  18. Huizinga, H.P., 1993. "International market integration and union wage bargaining," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-155144, Tilburg University.
  19. Vartiainen, Juhana, 2002. " Relative Prices in Monetary Union and Floating," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 104(2), pages 277-87, June.
  20. Falvey, Rod & Kreickemeier, Udo, 2005. "Globalisation and factor returns in competitive markets," Journal of International Economics, Elsevier, Elsevier, vol. 66(1), pages 233-248, May.
  21. Munch, Jakob Roland & Skaksen, Jan Rose, 2002. " Product Market Integration and Wages in Unionized Countries," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 104(2), pages 289-99, June.
  22. Paulo Bastos & Udo Kreickemeier & Peter Wright, . "Oligopoly, open shop unions and trade liberalisation," Discussion Papers 07/30, University of Nottingham, GEP.
  23. Straume, Odd Rune, 2003. "International mergers and trade liberalisation: implications for unionised labour," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(5), pages 717-735, May.
  24. Mezzetti, C. & Dinopoulos, E., 1989. "Domestic Unionization And Import Competition," Papers, California Davis - Institute of Governmental Affairs 337, California Davis - Institute of Governmental Affairs.
  25. Moene, K.O. & Wallerstein, M., 1995. "How Social Democracy Worked: Labour Market Institutions," Memorandum, Oslo University, Department of Economics 10/1995, Oslo University, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_3407. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.