Product Market Integration and Wages in Unionized Countries

Jakob Munch and Jan Rose Skaksen

Scandinavian Journal of Economics, 2002, vol. 104, issue 2, 289-299

Abstract: This paper addresses the effects of product market integration on wages. We develop a two–country general equilibrium model of international trade with imperfectly competitive product markets and unionized labor markets. Integration is modelled as either a fall in fixed or variable trade costs. A reduction in fixed trade costs leads to an unambiguous decrease in wages, whereas a reduction in variable trade costs has an ambiguous effect on wages. JEL classification: F15; J5; L13

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:104:y:2002:i:2:p:289-299

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