The Impact of Trade on Employment, Welfare, and Income Distribution in Unionized General Oligopolistic Equilibrium

Hartmut Egger (hartmut.egger@uni-bayreuth.de) and Daniel Etzel (daniel.etzel@bayern.ca)

No 88, Working Papers from Bavarian Graduate Program in Economics (BGPE)

Abstract: This paper sets up a general oligopolistic equilibrium model with unionized labor markets. By accounting for productivity di erences, the model features pro t and wage di erentials across industries. We use this setting to study the impact of trade liberalization on employment, welfare, and the distribution of income. In particular, we show that a movement from autarky to free trade with a symmetric partner country lowers union wage claims and therefore stimulates employment and raises welfare. Whether rms can extract a larger share of rents in the open economy depends on the competitive environment as well as on the degree of centralization in union wage setting. Finally, the distribution of proft income across firm owners remains unaffected, while the distribution of wage income becomes more equal when a country opens up to trade.

Keywords: General oligopolistic equilibrium; Unionized labor market; Trade liberalization; Income distribution (search for similar items in EconPapers)
JEL-codes: F12 F16 J51 L13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://bgpe.cms.rrze.uni-erlangen.de/files/2023/0 ... stic-Equilibrium.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: The impact of trade on employment, welfare, and income distribution in unionized general oligopolistic equilibrium (2012)
Working Paper: The Impact of Trade on Employment, Welfare, and Income Distribution in Unionized General Oligopolistic Equilibrium (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:bav:wpaper:088_egger

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