Declining industries and monopoly unions: a further argument against protection

Frank Barry

No 199504, Working Papers from School of Economics, University College Dublin

Abstract: Wage stickiness is frequently cited as a justification (temporary) protection when a sector is hit by an adverse shock. The present paper, rather than assuming arbitrary wage stickiness, instead models it as an outcome of monopoly union behaviour. It is shown that if intervention was not undertaken before the shock, because of a high marginal social cost of taxation, protection or subsidisation is even less appropriate after the shock occurs.

Keywords: Declining industries; Monopoly unions; Adjustment assistance; Wages; Labor unions; Trade adjustment assistance; Equilibrium (Economics) (search for similar items in EconPapers)
JEL-codes: D61 E24 J51 R13 (search for similar items in EconPapers)
Date: 1995-02
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http://hdl.handle.net/10197/1773 First version, 1995 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199504

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