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Unions and Globalisation

Author

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

Abstract

We analyze the effects of international integration of product and capital markets (i.e., globalisation) in a world where countries differ in their labour market institutions: one country has a perfectly competitive labour market while the other is unionized. We show that workers should favour autarky in the unionized country, but oppose it in the non unionized country. 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: there is a critical level of bargaining strength above which an increase in union power reduces workers' income in the unionized country.

Suggested Citation

  • Marta Aloi & Manuel Leite-Monteiro & Teresa Lloyd-Braga, 2007. "Unions and Globalisation," Discussion Papers 07/20, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:07/20
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2007/07-20.pdf
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    References listed on IDEAS

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    1. Harry C. Katz, 1993. "The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis," ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
    2. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, January.
    3. Kenneth F. Scheve & Matthew J. Slaughter, 2001. "Globalization and the Perceptions of American Workers," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 109.
    4. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Introduction to "Globalization in Historical Perspective"," NBER Chapters, in: Globalization in Historical Perspective, pages 1-10, National Bureau of Economic Research, Inc.
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    Keywords

    Capital mobility; Unions; Globalisation;

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