Exchange rates and wages in unionised labour markets

Paulo Bastos and Peter Wright

Discussion Papers from University of Nottingham, GEP

Abstract: We investigate the impact of exchange rate movements on wage determination in unionised labour markets. Using a simple model of international oligopoly, we show that organised labour has a rational incentive to accept lower wages in the face of a currency appreciation. This proposition is examined empirically using a matched worker-firm dataset for Portugal. We find results consistent with the predictions of the model, though the impact varies considerably with both worker characteristics and the regional unemployment rate.

Keywords: Exchange rates; trade unions; wage bargaining; worker-firm data (search for similar items in EconPapers)
Date: 2010
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Related works:
Journal Article: Exchange Rates and Wages in Unionized Labor Markets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:10/15

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