The endogenous decisions of unionization and international trade: A general oligopolistic equilibrium model analysis

Hosaki Sano ()
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Hosaki Sano: Graduate School of Economics, Osaka University

No 18-14, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper presents a multi-sector general oligopolistic equilibrium trade model in which unionized and non-unionized sectors interact. In our model, the proportion of unionized sectors to all sectors is endogenously determined. We show that the proportion of unionized sectors depends on exogenous parameters such as productivity, population, the number of firms, union costs, and globalization. The increase in population raises the proportion of unionized sectors and lowers the competitive wage, whereas the increase in the number of firms and in the union cost lowers the proportion of unionized sectors and raises the competitive wage. We also show that trade openness between symmetric countries raises the competitive wage and lowers the proportion of unionized sectors, whereas the effect on welfare is ambiguous.

Keywords: labor union; international trade; general oligopolistic equilibrium (search for similar items in EconPapers)
JEL-codes: F15 F16 L13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018-05
New Economics Papers: this item is included in nep-int
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