Unionized Labor Markets and Globalized Capital Markets

Marta Aloi, Manuel Leite-Monteiro and Teresa Lloyd-Braga

Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: This paper studies the effects of international integration of capital markets in a world where countries differ in their labor market institutions: one country has a perfectly competitive labor market while the other is unionized. We show that workers should favor autarky in the unionized country, but oppose it in the non unionized country and vice versa for owners of capital. Aggregate gains from integration, however, are negative. We also show that, under capital mobility, an increase in relative bargaining power of unions does not always improve workers’ welfare.

Keywords: Capital mobility; Globalization; Unions; Welfare. (search for similar items in EconPapers)
Date: 2008-10
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Citations: View citations in EconPapers (5)

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Journal Article: Unionized labor markets and globalized capital markets (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:08/10

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