Wage bargaining, job loss fears and offshoring
AbstractIn this paper I present a simple theoretical model where firms and trade unions negotiate over wages. Firms have the possibility to offshore parts of the ir production and trade union members have a disutility from individual job loss fears. I show that higher job loss fears result in lower wages. As a Nash bargaining result, firms can use potential but non realized offshoring as a threat to enforce lower wages. Using a large German household survey, I can show evidence that increasing potential offshoring lowers wages through high job loss fears. --
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Bibliographic InfoPaper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 174.
Date of creation: 2013
Date of revision:
offshoring; wage bargaining; job loss fears;
Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-29 (All new papers)
- NEP-INT-2013-11-29 (International Trade)
- NEP-LAB-2013-11-29 (Labour Economics)
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