International labour mobility and unemployment

Mark Roberts and Michael Bleaney
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Mark Roberts: University of Nottingham

No 174, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: We develop a two-country labour-market model characterised by union wage-bargaining, in which the unemployed incur individual-specific costs of seeking work abroad. We explore the effects on equilibrium unemployment in each country of changes in union bargaining strength, the ratio of unemployment benefits to wages, and employers' willingness to hire foreign workers. Unfavourable labour-market institutions increase unemployment abroad as well as at home. We find that no country has an incentive to internationalise its own labour market unilaterally, because all the employment gains spill over abroad, which gives countries a strong incentive to co-ordinate on internationalisation.

Keywords: international labour mobility; unions; wage bargaining; globalization; unemployment (search for similar items in EconPapers)
JEL-codes: F22 F42 J51 J61 (search for similar items in EconPapers)
Date: 2003-06-04
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