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Unionized Labor Markets and Globalized Capital Markets

Author

Listed:
  • Marta Aloi
  • Manuel Leite-Monteiro
  • Teresa Lloyd-Braga

Abstract

This paper studies the effects of international integration of capital markets in a world where countries differ in their labor market institutions: one country has a perfectly competitive labor market while the other is unionized. We show that workers should favor autarky in the unionized country, but oppose it in the non unionized country and vice versa for owners of capital. Aggregate gains from integration, however, are negative. We also show that, under capital mobility, an increase in relative bargaining power of unions does not always improve workers’ welfare.

Suggested Citation

  • Marta Aloi & Manuel Leite-Monteiro & Teresa Lloyd-Braga, 2008. "Unionized Labor Markets and Globalized Capital Markets," Discussion Papers 08/10, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:08/10
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    File URL: https://www.nottingham.ac.uk/cfcm/documents/papers/08-10.pdf
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    Cited by:

    1. Pica Giovanni, 2010. "Capital Markets Integration and Labor Market Institutions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-57, March.
    2. Toshiki Tamai & Gareth Myles, 2022. "Unemployment, tax competition, and tax transfer policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(3), pages 470-503, June.
    3. Hikaru Ogawa & Yasuhiro Sato & Toshiki Tamai, 2016. "Who gains from capital market integration? Tax competition between unionized and non-unionized countries," Canadian Journal of Economics, Canadian Economics Association, vol. 49(1), pages 76-110, February.
    4. Sara Amoroso & Mafini Dosso & Pietro Moncada-Paterno-Castello, 2015. "The impact of skill endowments and collective bargaining on knowledge-intensive greenfield FDI," JRC Working Papers on Corporate R&D and Innovation 2015-08, Joint Research Centre.
    5. Palokangas, Tapio K., 2017. "Labor Market Regulation, International Trade and Footloose Capital," IZA Discussion Papers 10468, Institute of Labor Economics (IZA).
    6. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.
    7. Hamid Beladi & Chi-Chur Chao & Daniel Hollas, 2013. "Does globalization weaken labor unions in developing countries?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(4), pages 562-571, June.
    8. repec:ilo:ilowps:469448 is not listed on IDEAS
    9. Aronsson, Thomas & Koskela, Erkki, 2009. "Optimal Income Taxation, Outsourcing and Policy Cooperation in a Dynamic Economy," Umeå Economic Studies 784, Umeå University, Department of Economics.
    10. Satoshi Kasamatsu & Hikaru Ogawa, 2020. "International capital market and repeated tax competition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 751-768, June.
    11. Donado, Alejandro. & Wälde, Klaus., 2012. "Globalization, trade unions and labour standards in the North," ILO Working Papers 994694483402676, International Labour Organization.
    12. Yuya Kikuchi & Arihiro Kuzawa & Toshiki Tamai, 2026. "Unemployment, Fiscal Competition, and the Composition of Public Expenditure," Public Finance Review, , vol. 54(1), pages 87-109, January.
    13. Rüdiger Pethig & Frieder Kolleß, 2009. "Asymmetric capital-tax competition, unemployment and losses from capital market integration," Volkswirtschaftliche Diskussionsbeiträge 137-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    14. Tapio Palokangas, 2020. "Public policy, footloose capital, and union influence," Review of International Economics, Wiley Blackwell, vol. 28(4), pages 976-991, September.
    15. 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).

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