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

Hartmut Egger () and Daniel Etzel ()

No 2895, CESifo Working Paper Series from CESifo

Abstract: This paper sets up a general oligopolistic equilibrium model with unionized labor markets. By accounting for productivity differences, the model features profit and wage differentials 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 firms 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 profit 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)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp2895.pdf (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 (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2895

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().