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How Bad is Globalization for Labour Standards in the North?

Author

Listed:
  • Alejandro DONADO

    (University of Wurzburg, Department of Economics)

  • Klaus WALDE

    (University of Mainz, School of Management and Economics, Universite catholique de Louvain and CESifo)

Abstract

We analyse a world consisting of "the North" and "the South" where labour standards in the North are set by trade unions. Standards set by unions tend to increase output and welfare. There are no unions in the South and work standards are suboptimal. Trade between these two countries can imply a reduction in work standards in the North. Moreover, when trade unions are established in the South, the North, including northern unions, tend to lose. Quantitatively, these effects are small and overcompensated by gains in the South. The existing empirical literature tends to support our findings.

Suggested Citation

  • Alejandro DONADO & Klaus WALDE, 2010. "How Bad is Globalization for Labour Standards in the North?," LIDAM Discussion Papers IRES 2010028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2010028
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    Cited by:

    1. Alejandro Donado, 2021. "Why do they JUST DO IT? A Theory of Outsourcing and Working Conditions," Open Economies Review, Springer, vol. 32(3), pages 559-586, July.

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    More about this item

    Keywords

    occupational health and safety; trade unions; international trade; welfare;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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