The Welfare Effects of Globalization with Labor Market Regulation

Arbeitspapier

I examine how globalization affects wages and welfare in a general equilibrium model of international trade with partly oligopolistic markets. Globalization is modeled as reducing trade costs or opening up shielded sectors to trade. There is a national or international common agency that determines minimum wages for the oligopolists, either directly or through supporting labor unions. The lobbies of employers and labor unions influence that agency, relating their prospective political contributions to the latter's decisions. Both a shift from national to international regulation and a decrease in trade costs promote aggregate welfare, but decrease open-sector relative wages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 9412

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Trade and Labor Market Interactions ; Trade Unions: Objectives, Structure, and Effects
• Subject: globalization ; international trade ; common agency ; regulation ; labor unions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Palokangas, Tapio K.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/124925
• Last update: 10.03.2025, 11:44 AM CET