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Product Market Integration and Wages in Unionized Countries

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  • Munch, Jakob Roland
  • Skaksen, Jan Rose

Abstract

This paper addresses the effects of product market integration on wages. We develop a two-country general equilibrium model of international trade with imperfectly competitive product markets and unionized labor markets. Integration is modelled as either a fall in fixed or variable trade costs. A reduction in fixed trade costs leads to an unambiguous decrease in wages, whereas a reduction in variable trade costs has an ambiguous effect on wages. Copyright 2002 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Munch, Jakob Roland & Skaksen, Jan Rose, 2002. " Product Market Integration and Wages in Unionized Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(2), pages 289-299, June.
  • Handle: RePEc:bla:scandj:v:104:y:2002:i:2:p:289-99
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    Citations

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    Cited by:

    1. Mauleon, Ana & Vannetelbosch, Vincent, 2010. "Market integration and strike activity," Journal of International Economics, Elsevier, vol. 81(1), pages 154-161, May.
    2. Michele SANTONI, 2009. "Does product market integration lead to decentralised wage bargaining institutions?," Departmental Working Papers 2009-43, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    3. Yao Liu & Arijit Mukherjee, 2013. "The Effects of Trade Liberalization in a Vertical Structure," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 966-973, November.
    4. Santoni, Michele, 2014. "Product market integration and wage bargaining institutions," Labour Economics, Elsevier, vol. 27(C), pages 1-15.
    5. Lommerud, Kjell Erik & Meland, Frode & Rune Straume, Odd, 2006. "Globalisation and union opposition to technological change," Journal of International Economics, Elsevier, vol. 68(1), pages 1-23, January.
    6. Udo Kreickemeier & Frode Meland, 2017. "Non-Traded Goods, Globalization, and Union Influence," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 7, pages 173-201 World Scientific Publishing Co. Pte. Ltd..
    7. Kjell Erik Lommerud & Odd Rune Straume & Lars Sørgard, 2006. "National versus international mergers in unionized oligopoly," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 212-233, March.
    8. Maiti, Dibyendu & Mukherjee, Arijit, 2013. "Trade cost reduction, subcontracting and unionised wage," Labour Economics, Elsevier, vol. 21(C), pages 103-110.
    9. Udo Kreickemeier & Frode Meland, "undated". "International Trade, Union Wage Premia, and Welfare in General Equilibrium," Discussion Papers 11/05, University of Nottingham, GEP.
    10. Mukherjee, Arijit, 2013. "Endogenous domestic market structure and the effects of a trade cost reduction in a unionised industry," Economic Modelling, Elsevier, vol. 32(C), pages 30-33.
    11. Paulo Bastos & Udo Kreickemeier, 2017. "Unions, Competition, and International Trade in General Equilibrium," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 6, pages 143-172 World Scientific Publishing Co. Pte. Ltd..
    12. Bastos, Paulo & Kreickemeier, Udo & Wright, Peter, 2009. "Oligopoly, open shop unions and trade liberalisation," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 679-686, November.
    13. Beatrice Pagel & Christian Wey, 2013. "Unionization Structures in International Oligopoly," LABOUR, CEIS, vol. 27(1), pages 1-17, March.
    14. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.
    15. Blomgren-Hansen, Niels, 2012. "Optimum organization of the labor market in a small open economy," Labour Economics, Elsevier, vol. 19(2), pages 222-231.
    16. Debasmita Basask, "undated". "Price competition and the effects of labour union on process innovation," Discussion Papers 12/05, University of Nottingham, School of Economics.
    17. Dibyendu Maiti & Arijit Mukherjee, "undated". "Trade Liberalisation, Subcontracting and Unionised Wage," Discussion Papers 10/07, University of Nottingham, GEP.

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