Product Market Integration, Wage Bargaining and Strike Activity

Ana Mauleon and Vincent J. Vannetelbosch
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Vincent J. Vannetelbosch: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 2001022, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We develop a spatial two-country model of wage determination with private information in unionized imperfectly competitive industries. We investigage the effects of separated product markets opening up for competition as well as of further market integration on the negotiated wage and the strike activity. We show that, when product markets are separated, the wage level and the strike activity are decreasing with the transportation cost and the home market size. However, when markets are integrated, wages and strikes are now increasing with the transportation cost. Finally, we find that the opening of markets for competition has an ambiguous impact on both the negotiated wage and the strike activity.

Keywords: economic integration; horizontal differentiation; product market competition; wage bargaining; strike activity (search for similar items in EconPapers)
JEL-codes: C78 F15 J50 J52 L13 (search for similar items in EconPapers)
Pages: 17
Date: 2001-09-01
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2001022

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