International Production and Wage Coordination in an Integrated Economy (revised)

Domenico Buccella

No 25, FIW Working Paper series from FIW

Abstract: Key aspects in economic integrated areas like the EU are both the internationalization of productive activities, which usually occurs in unionized countries, and the ongoing process of labor market integration. In a symmetric two-country duopoly model with integrated product markets, this paper investigates the incentives for unions to coordinate wage demands in the presence of transaction costs. It shows that, contrary to conventional wisdom, under certain conditions wage coordination could lead from a social point of view to a Pareto superior outcome respect to separate wage settings.

Keywords: international production; wage coordination; labor unions (search for similar items in EconPapers)
JEL-codes: F21 F23 J50 J51 (search for similar items in EconPapers)
Pages: 14
Date: 2011-07
New Economics Papers: this item is included in nep-lab
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