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Unionisation, International Integration and Selection

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  • Montagna, Catia
  • Nocco, Antonella

Abstract

We study how unionisation affects competitive selection between heterogeneous firms when wage negotiations can occur at the rm or at the profit-centre level. With productivity specific wages, an increase in union power has: (i) a selection-softening; (ii) a counter-competitive; (iii) a wage-inequality; and (iv) a variety effect. In a two-country asymmetric setting, stronger unions soften competition for domestic firms and toughen it for exporters. With profit-centre bargaining, we show how trade liberalisation can affect wage inequality among identical workers both across firms (via its effects on competitive selection) and within firms (via wage discrimination across destination markets).

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File URL: http://repo.sire.ac.uk/handle/10943/346
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Bibliographic Info

Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2012-22.

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Date of creation: 2012
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Handle: RePEc:edn:sirdps:346

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Keywords: firm selection; unionisation; wage inequality; trade liberalisation;

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References

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Cited by:
  1. Catia Montagna & Antonella Nocco, 2012. "Trade Costs, International Competition and Selection: The Effects of Unionisation on Market Size," Dundee Discussion Papers in Economics 269, Economic Studies, University of Dundee.
  2. Felbermayr, Gabriel & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2012. "International trade and collective bargaining outcomes : evidence from German employer-employee data," IAB Discussion Paper 201207, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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