International labour mobility and unemployment
AbstractWe develop a two-country labour-market model characterised by union wage-bargaining, in which the unemployed incur individual-specific costs of seeking work abroad. We explore the effects on equilibrium unemployment in each country of changes in union bargaining strength, the ratio of unemployment benefits to wages, and employers' willingness to hire foreign workers. Unfavourable labour-market institutions increase unemployment abroad as well as at home. We find that no country has an incentive to internationalise its own labour market unilaterally, because all the employment gains spill over abroad, which gives countries a strong incentive to co-ordinate on internationalisation.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 174.
Date of creation: 04 Jun 2003
Date of revision:
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More information through EDIRC
international labour mobility; unions; wage bargaining; globalization; unemployment;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
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