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"Ménage à trois" in a globalizing world: bargaining between firms, low-skilled and high-skilled workers


  • G. RAYP




This paper extends the assessment of the impact of globalization on the bargaining power of employees by taking worker heterogeneity into account. In contrast with previous studies, two separate unions - representing low-skilled and high-skilled workers respectively - are considered. Using Belgian firm-level data, labour bargaining power and relative wage preference have been estimated by skill level. Subsequently regressing these estimates on a set of potential determinants, the bargaining power of low-skilled workers appears to fall with imports and offshoring, whereas the bargaining power of high-skilled workers remains unaffected. In addition, a significant effect of globalization is found on the relative preference of unions for wages over employment, indicating that the effect of globalization on the behaviour of labour unions is more encompassing than frequently assumed. A positive impact of R&D intensity on the bargaining power of low-skilled workers is the only effect related to technological change that is found to be statistically significant.

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  • M. Dumont & G. Rayp & P. Willemé, 2010. ""Ménage à trois" in a globalizing world: bargaining between firms, low-skilled and high-skilled workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/687, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:10/687

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    1. Oskar Nordström Skans & Per-Anders Edin & Bertil Holmlund, 2009. "Wage Dispersion Between and Within Plants: Sweden 1985-2000," NBER Chapters,in: The Structure of Wages: An International Comparison, pages 217-260 National Bureau of Economic Research, Inc.
    2. Lourdes Moreno & Diego Rodríguez, 2011. "Markups, Bargaining Power and Offshoring: An Empirical Assessment-super-1," The World Economy, Wiley Blackwell, vol. 34(9), pages 1593-1627, September.
    3. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2009. "The effect of globalization on union bargaining and price-cost margins of firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(1), pages 13-36, April.
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