Open Shop Unions and International Trade Liberalisation

University of Nottingham Research Paper No. 2005/02

41 Pages Posted: 2 Aug 2005

See all articles by Paulo Bastos

Paulo Bastos

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE); ISEG Lisbon School of Economics and Management,Universidade de Lisboa

Udo Kreickemeier

University of Tuebingen; CESifo (Center for Economic Studies and Ifo Institute); University of Goettingen (Göttingen) - Faculty of Economics and Business Administration

Peter W Wright

University of Sheffield - Department of Economics

Abstract

This paper extends the international oligopoly model to the situation of bargaining with an open shop union. Within this setting, we are able to investigate the implications of different levels of union density for both the equilibrium trade regime and wages. We then use this model to examine the response of wages to product market integration in the presence of different levels of union density. We find that, with intermediate levels of union density, wages need neither to fall monotonically as trade liberalisation occurs, nor indeed to fall in absolute terms as an economy moves from autarky to free trade.

Keywords: Bargaining, open shop unions, trade liberalisation

JEL Classification: F15, J5, L13

Suggested Citation

Bastos, Paulo and Kreickemeier, Udo and Wright, Peter W, Open Shop Unions and International Trade Liberalisation. University of Nottingham Research Paper No. 2005/02, Available at SSRN: https://ssrn.com/abstract=764407 or http://dx.doi.org/10.2139/ssrn.764407

Paulo Bastos (Contact Author)

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE) ( email )

Rua Miguel Lupi, 20
Lisboa, 1200-781
Portugal

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

Udo Kreickemeier

University of Tuebingen ( email )

DE-72074 Tubingen
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

University of Goettingen (Göttingen) - Faculty of Economics and Business Administration ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

Peter W Wright

University of Sheffield - Department of Economics ( email )

9 Mappin Street
Sheffield, S1 4DT
UNITED KINGDOM

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