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Organized Labor and the Scope of International Specialization

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Robert W. Staiger

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Abstract

This paper examines the interaction between union wages and the international pattern of production and trade. If union goods are heterogeneous in labor intensity, the introduction of an active union in the domestic country causes only the least labor-intensive range of union goods to be produced there, with goods of greatest labor intensity produced abroad due to the relatively high cost of domestic union Labor. A narrowing of the scope of domestic union production will eliminate relatively labor-intensive goods, leading a rent-maximizing union to raise its union premium. The implications of this union behavior for comparative statics results are considered.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2514.

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Date of creation: Feb 1988
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Handle: RePEc:nbr:nberwo:2514

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  1. Diewert, W E, 1974. "The Effects of Unionization on Wages and Employment: A General Equilibrium Analysis," Economic Inquiry, Oxford University Press, vol. 12(3), pages 319-39, September.
  2. Freeman, Richard B & Medoff, James L, 1982. "Substitution between Production Labor and Other Inputs in Unionized and Nonunionized Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 220-33, May. [Downloadable!] (restricted)
  3. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-39, December. [Downloadable!] (restricted)
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  4. Oswald, Andrew J, 1982. "Trade Unions, Wages and Unemployment: What Can Simple Models Tell Us?," Oxford Economic Papers, Oxford University Press, vol. 34(3), pages 526-45, November. [Downloadable!] (restricted)
  5. Freeman, Richard B & Medoff, James L, 1981. "The Impact of the Percentage Organized on Union and Nonunion Wages," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 561-72, November. [Downloadable!] (restricted)
  6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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  1. Huizinga, H., 1995. "International Trade and Migration in the Presence of Sector-Specific Labor Quality Pricing Distortions," Discussion Paper 39, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Kjell Erik Lommerud & Frode Meland & Odd Rune Straume, 2005. "Can Deunionization Lead to International Outsourcing?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  3. Kjell Erik Lommerud & Odd Rune Straume, 2008. "Employment Protection versus Flexicurity: On Technology Adoption in Unionised Firms," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. David G. Blanchflower & Alex Bryson, 2003. "What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?," NBER Working Papers 9973, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Kjell Erik Lommerud & Odd Rune Straume, 2007. "Technology resistance and globalisation with trade unions: the choice between employment protection and flexicurity," NIPE Working Papers 25/2007, NIPE - Universidade do Minho. [Downloadable!]
  6. David Blanchflower & Alex Bryson, 2004. "The Union Wage Premium in the US and the UK," CEP Discussion Papers dp0612, Centre for Economic Performance, LSE. [Downloadable!]
  7. 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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  8. 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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