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Unionisation, International Integration and Selection

  • Catia Montagna
  • Antonella Nocco

We study how unionisation affects competitive selection between heterogeneous firms when wage negotiations can occur at the firm or at the profit-centre level. With productivity specific wages, an increase in union power has: (i) a selection-softening; (ii) a counter-competitive; (iii) a wage-inequality; and (iv) a variety effect. In a two-country asymmetric setting, stronger unions soften competition for domestic firms and toughen it for exporters. With profit-centre bargaining, we show how trade liberalisation can affect wage inequality among identical workers both across firms (via its effects on competitive selection) and within firms (via wage discrimination across destination markets).

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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 12/07.

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Handle: RePEc:not:notgep:12/07
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  16. Catia Montagna, 1998. "Efficiency Gaps, Love of Variety and International Trade," Dundee Discussion Papers in Economics 090, Economic Studies, University of Dundee.
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  18. John Driffill, 2006. "The Centralization of Wage Bargaining Revisited: What Have we Learnt?," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 731-756, November.
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  23. Klaus Wälde & Pia Weiss, 2004. "International Competition, Slim Firms and Wage Inequality," CESifo Working Paper Series 1254, CESifo Group Munich.
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