Global Firms, (de)unionization and Wage Inequality

Óscar Afonso, Tiago Sequeira, Marcelo Santos and Pedro Cunha Neves ()
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Óscar Afonso: University of Porto
Pedro Cunha Neves: University of Porto

Open Economies Review, 2023, vol. 34, issue 5, No 3, 979-1013

Abstract: Abstract This paper studies the simultaneous effects of relocation of production (as part of globalization) and institutions on intra- and inter-country wage inequality. Firstly, empirical evidence shows that labor unions act at decreasing inequality, but this shrinking effect tends to be mitigated by globalization. Theoretically, we study the conditions under which this empirical evidence is verified. Unskilled labor-intensive relocations together with (de)unionization processes of the labor force contributed to the increasing path of intra-country wage inequality observed in some of the leading countries. However, most recently, skilled relocations may help to decrease intra-country inequality in leading countries (e.g., the US), but to increase it in follower countries (e.g., China).

Keywords: Global firms; Technological knowledge; Bargaining structure; Employment; Wages (search for similar items in EconPapers)
JEL-codes: E24 F16 J24 J50 M21 O33 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11079-023-09716-7

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