Trade Liberalization and Labor Unions

Toru Kikuchi () and J. Atsu Amegashie

Open Economies Review, 2003, vol. 14, issue 1, pages 5-9

Abstract: The present note builds a two-country model of Cournot oligopoly with country-specific labor unions. The impact of trade liberalization on wages and its consequent impact on union behavior and trade patterns are examined. We show that the union with relatively fewer number of firms will face the stronger pressure for wage moderation when trade is liberalized. We use this result to construct a simple example in which a country with higher autarky price becomes a net exporter of that good. We also discuss that our results are critically dependent on the mode of competition between firms. Copyright Kluwer Academic Publishers 2003

Keywords: trade liberalization; labor unions; trade patterns (search for similar items in EconPapers)
Date: 2003
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