Unionized labor markets and globalized capital markets

Marta Aloi (), Leite-Monteiro, Manuel and Teresa Lloyd-Braga ()

Journal of International Economics, 2009, vol. 78, issue 1, pages 149-153

Abstract: This paper studies the effects of international integration of capital markets in a world where countries differ in their labor market institutions: one country has a perfectly competitive labor market while the other is unionized. We show that workers should favor autarky in the unionized country, but oppose it in the non unionized country and vice versa for owners of capital. Aggregate gains from integration, however, are negative. We also show that, under capital mobility, an increase in relative bargaining power of unions does not always improve workers' welfare.

Keywords: Capital; mobility; Globalization; Unions; Welfare (search for similar items in EconPapers)
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:eee:inecon:v:78:y:2009:i:1:p:149-153

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