Exchange Rates and Wages in Unionized Labor Markets

Peter Wright and Paulo Bastos

ILR Review, 2012, vol. 65, issue 4, 975-999

Abstract: The authors investigate the impact of exchange rate movements on wage determination in unionized labor markets. Using a simple model of international oligopoly, the authors show that organized labor has a rational incentive to accept lower wages in the face of a currency appreciation. They examine this proposition empirically using a matched worker-firm data set for Portugal and, though the impact varies considerably with worker characteristics, find results consistent with the predictions of the model.

Date: 2012
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Working Paper: Exchange rates and wages in unionised labour markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:65:y:2012:i:4:p:975-999

DOI: 10.1177/001979391206500409

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