IDEAS home Printed from https://ideas.repec.org/p/wrk/warwec/480.html
   My bibliography  Save this paper

Union Wage Strategies and International Trade

Author

Listed:
  • Naylor, Robin

Abstract

In this paper, we analyze the relationship between wage outcomes and the nature of international trade and economic integration when labour markets are unionized and a homogeneous product market is characterized by intra-industry trade. We characterize the full set of possible trade regimes for different combinations of wages and derive unions' wage reaction functions. We show that a unions' choice between a high and a low-wage strategy will depend on the value of the trade costs. We find that: (i) compared to a non-union setting, unions reduce the prohibitive trade cost and that (ii) this rules out trade in that region of trade costs over which, in the non-union model. welfare falls as trade costs fall, (iii) in any trade equilibrium, falling trade costs lead monopoly unions to set higher wages, (iv) there is a range of trade costs for which equilibrium is non-existent and (v) the characterization of the union wage-setting as a Prisioners' Dilemma and hence the incentives for international union coordination of wage demands, depend upon the extent of trade costs.

Suggested Citation

  • Naylor, Robin, 1997. "Union Wage Strategies and International Trade," The Warwick Economics Research Paper Series (TWERPS) 480, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:480
    as

    Download full text from publisher

    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/1995-1998/twerp480.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    international trade ; tariffs ; economic integration ; wage determination ; union bargaining;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Margaret Nash (email available below). General contact details of provider: https://edirc.repec.org/data/dewaruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.