Has International Trade Affected Workers’ Bargaining Power?
In this paper, we investigate whether international trade has affected workers?wages and their bargaining power in particular in the Belgian manufacturing industry over the period 1987-1995 by relying on a rent-sharing framework. Using a sample of more than 12 000 firms, we find that international trade has an effect on workers?wages through changes in the firms?profits. Our regression results reveal that increased foreign competition in the form of lower export prices reduces both wages per worker and profits per worker. Besides, our findings indicate that technological change is an important determinant of the workers?(relative) bargaining power. Globalisation seems also to play some role.
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Volume (Year): 142 (2006)
Issue (Month): 2 (July)
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