GEP Research Paper 07/30
Oligopoly, open shop unions and trade liberalisation
Paulo Bastos, Udo Kreickemeier and Peter Wright
Summary
This paper develops an international unionised oligopoly model to investigate the impact of trade liberalisation on collective bargaining outcomes when workers are represented by open shop trade unions.
Abstract
In an international oligopoly model, we investigate how trade liberalisation impacts on collective bargaining outcomes when workers are represented by open shop unions. We find that, with intermediate levels of union density, trade liberalisation may lead to higher negotiated wages even if no trade occurs in equilibrium. In addition, we show that union wages may be higher with free trade than in autarky.
Issued in September 2007
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