Exchange rates and wages in unionised labour markets
AbstractWe investigate the impact of exchange rate movements on wage determination in unionised labour markets. Using a simple model of international oligopoly, we show that organised labour has a rational incentive to accept lower wages in the face of a currency appreciation. This proposition is examined empirically using a matched worker-firm dataset for Portugal. We find results consistent with the predictions of the model, though the impact varies considerably with both worker characteristics and the regional unemployment rate.
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Bibliographic InfoPaper provided by University of Nottingham, GEP in its series Discussion Papers with number 10/15.
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Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
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Exchange rates; trade unions; wage bargaining; worker-firm data;
Other versions of this item:
- Peter W. Wright & Paulo Bastos, 2012. "Exchange Rates and Wages in Unionized Labor Markets," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 65(4), pages 975-999, October.
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- Benjamin Bridgman, 2011. "Competition, Work Rules and Productivity," 2011 Meeting Papers, Society for Economic Dynamics 289, Society for Economic Dynamics.
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