Labor Unions, Unemployment, and Trade and Capital Liberalization

Geide-Stevenson, Doris

doi:2000.15.1.76

The Journal of Economic Integration 2000 March;15(1) :76-99.
DOI: https://doi.org/10.11130/jei.2000.15.1.76

Labor Unions, Unemployment, and Trade and Capital Liberalization

Doris Geide-Stevenson

Weber State University

ABSTRACT

This paper utilizes a specific factor model where rewards to labor and capital, and employment are determined by efficient bargaining between entrepreneurs and workers in each sector. Union threat points arise endogenously since workers' outside opportunities in one sector depend on the bargain struck in the other sector. This fully unionized economy will generally be characterized by unemployment and inter- industry wage differentials. Both trade and capital liberalization may lead to an increase in overall employment. (JEL Classifications: F10, F15, F20, J51, J64) <

Keywords: Trade unions | Unemployment | Economic integration