Do capital market and trade liberalization trigger labor market deregulation?
Over the past decades, product market deregulation has typically preceded labor market reforms in OECD countries. This paper incorporates labor market rigidities in a model of footloose capital in order to study how globalization might affect the trade-offs generated by labor market regulation and put pressure on labor market institutions. In this two-sector model, globalization ultimately reduces labor market rigidities through either one of two channels: capital mobility triggers a re-allocation of resources, which trade integration amplifies, away from the high-rent / highly-unionized sector; the threat of costly relocations encourages labor market deregulation. The latter channel is more efficient because it avoids sub-optimal sectoral specialization.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hornstein, Andreas & Krusell, Per & Violante, Giovanni L, 2005.
"The Effects of Technical Change on Labour Market Inequalities,"
CEPR Discussion Papers
5025, C.E.P.R. Discussion Papers.
- Hornstein, Andreas & Krusell, Per & Violante, Giovanni L., 2005. "The Effects of Technical Change on Labor Market Inequalities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 20, pages 1275-1370 Elsevier.
- Andreas Hornstein & Per Krussell & Giovanni L. Violante, 2004. "The effects of technical change on labor market inequalities," Working Paper 04-08, Federal Reserve Bank of Richmond.
- Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2005. "The Effects of Technical Change on Labor Market Inequalities," Working Papers 89, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Olivier Blanchard & Francesco Giavazzi, 2001.
"Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets,"
NBER Working Papers
8120, National Bureau of Economic Research, Inc.
- Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects Of Regulation And Deregulation In Goods And Labor Markets," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 879-907, August.
- Blanchard, Olivier J & Giavazzi, Francesco, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labour Markets," CEPR Discussion Papers 2713, C.E.P.R. Discussion Papers.
- Olivier Blanchard & Francesco Giavazzi, . "Macroeconomic effects of regulation and deregulation in goods and labor markets," Working Papers 187, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Boulhol, Hervé & Dobbelaere, Sabien & Maioli, Sara, 2006.
"Imports as Product and Labor Market Discipline,"
IZA Discussion Papers
2178, Institute for the Study of Labor (IZA).
- H. Boulhol & S. Dobbelaere & S. Maioli, 2007. "Imports as product and labour market discipline," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/479, Ghent University, Faculty of Economics and Business Administration.
- Marianne Bertrand, 1999.
"From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship,"
NBER Working Papers
6900, National Bureau of Economic Research, Inc.
- Marianne Bertrand, 2004. "From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 723-766, October.
- Borjas, George J & Ramey, Valerie A, 1995. "Foreign Competition, Market Power, and Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1075-1110, November.
- Pencavel, John, 2003.
"The Surprising Retreat of Union Britain,"
IZA Discussion Papers
818, Institute for the Study of Labor (IZA).
- Axel Dreher & Noel Gaston, 2005.
"Has globalisation really had no effect on unions?,"
KOF Working papers
05-110, KOF Swiss Economic Institute, ETH Zurich.
- Dean Baker & Andrew Glyn & David Howell & John Schmitt, 2002.
"Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence,"
SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization.
2002-17, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
- Andrew Glyn, 2003. "Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence," Economics Series Working Papers 168, University of Oxford, Department of Economics.
- Gilles Saint-Paul, 2004.
"Why are European Countries Diverging in their Unemployment Experience?,"
Journal of Economic Perspectives,
American Economic Association, vol. 18(4), pages 49-68, Fall.
- Saint-Paul, Gilles, 2004. "Why Are European Countries Diverging in Their Unemployment Experience?," IZA Discussion Papers 1066, Institute for the Study of Labor (IZA).
- Saint-Paul, Gilles, 2004. "Why are European Countries Diverging in their Unemployment Experience?," CEPR Discussion Papers 4328, C.E.P.R. Discussion Papers.
- Saint-Paul, Gilles, 2004. "Why are European Countries Diverging in their Unemployment Experience?," IDEI Working Papers 269, Institut d'Économie Industrielle (IDEI), Toulouse.
- Martin, Philippe & Rogers, Carol Ann, 1995.
"Industrial location and public infrastructure,"
Journal of International Economics,
Elsevier, vol. 39(3-4), pages 335-351, November.
- Richard B. Freeman, 2007.
"Searching for the EU Social Dialogue Model,"
AIEL Series in Labour Economics,
in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 11, pages 221-238
AIEL - Associazione Italiana Economisti del Lavoro.
- Giuseppe Nicoletti & Stefano Scarpetta, 2005. "Product Market Reforms and Employment in OECD Countries," OECD Economics Department Working Papers 472, OECD Publishing.
- Noel Gaston & Douglas Nelson, 2004. "Structural Change and the Labor-market Effects of Globalization," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 769-792, November.
- Spector, David, 2004.
"Competition and the capital-labor conflict,"
European Economic Review,
Elsevier, vol. 48(1), pages 25-38, February.
- Ebell, Monique & Haefke, Christian, 2006. "Product Market Regulation and Endogenous Union Formation," IZA Discussion Papers 2222, Institute for the Study of Labor (IZA).
- Davis, Donald R, 1998. "Does European Unemployment Prop Up American Wages? National Labor Markets and Global Trade," American Economic Review, American Economic Association, vol. 88(3), pages 478-94, June.
- Michel Dumont & Glenn Rayp & Peter Willemé, 2006. "Does internationalization affect union bargaining power? An empirical study for five EU countries," Oxford Economic Papers, Oxford University Press, vol. 58(1), pages 77-102, January.
- Francis Kramarz, 2003.
"Wages and International Trade,"
2003-27, Centre de Recherche en Economie et Statistique.
- Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
- Olivier Blanchard, 2006.
"European unemployment: the evolution of facts and ideas,"
CEPR;CES;MSH, vol. 21(45), pages 5-59, 01.
- Olivier Blanchard, 2005. "European Unemployment: The Evolution of Facts and Ideas," NBER Working Papers 11750, National Bureau of Economic Research, Inc.
- Nicola Brandt & Jean-Marc Burniaux & Romain Duval, 2005. "Assessing the OECD Jobs Strategy: Past Developments and Reforms," OECD Economics Department Working Papers 429, OECD Publishing.
- McDonald, Ian M & Solow, Robert M, 1985. "Wages and Employment in a Segmented Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1115-41, November.
When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:77:y:2009:i:2:p:223-233. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.