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Non-traded Goods, Globalization and Union Influence

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  • Udo Kreickemeier
  • Frode Meland

Abstract

We study how globalization affects sector-specific wages, employment levels and welfare in a model of general oligopolistic equilibrium with partly unionized labor markets. Globalization is modeled as either reducing trade costs in open sectors or opening up shielded sectors to trade. Both forms of globalization increase union coverage and lead to lower union wage premia in shielded sectors. Trade cost reductions furthermore lead to higher union wage premia in open sectors and to lower aggregate welfare, while an increased number of open sectors lowers the union wage premium in open sectors, and may increase welfare.
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Suggested Citation

  • Udo Kreickemeier & Frode Meland, 2013. "Non-traded Goods, Globalization and Union Influence," Economica, London School of Economics and Political Science, vol. 80(320), pages 774-792, October.
  • Handle: RePEc:bla:econom:v:80:y:2013:i:320:p:774-792
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    Citations

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    Cited by:

    1. Kamei, Keita, 2014. "International Trade, Unemployment, and Firm Owners in a General Equilibrium with Oligopoly," MPRA Paper 59388, University Library of Munich, Germany.
    2. Fujiwara, Kenji, 2017. "Trade and FDI liberalization in a general oligopolistic equilibrium," Japan and the World Economy, Elsevier, vol. 41(C), pages 45-49.
    3. Hosaki Sano, 2018. "The endogenous decisions of unionization and international trade: A general oligopolistic equilibrium model analysis," Discussion Papers in Economics and Business 18-14, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    4. Egger, Hartmut & Etzel, Daniel, 2014. "Union wage-setting and international trade with footloose capital," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 56-67.
    5. Kenji Fujiwara, 2016. "Trade and FDI liberalization in a general oligopolistic equilibrium," Discussion Paper Series 150, School of Economics, Kwansei Gakuin University, revised Nov 2016.
    6. repec:eee:reecon:v:71:y:2017:i:3:p:564-587 is not listed on IDEAS
    7. repec:bla:reviec:v:25:y:2017:i:1:p:76-97 is not listed on IDEAS
    8. Hosaki Sano, 2018. "Labor union and firm fs relocation: A general oligopolistic equilibrium model analysis," Discussion Papers in Economics and Business 18-15-Rev., Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised May 2018.
    9. Palokangas, Tapio K., 2015. "The Welfare Effects of Globalization with Labor Market Regulation," IZA Discussion Papers 9412, Institute for the Study of Labor (IZA).
    10. Palokangas, Tapio K., 2017. "Labor Market Regulation, International Trade and Footloose Capital," IZA Discussion Papers 10468, Institute for the Study of Labor (IZA).
    11. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
    12. Kamei, Keita, 2014. "Pro-competitive effect, division of labor, and firm productivity," Economics Letters, Elsevier, vol. 124(1), pages 132-135.

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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