Can deunionization lead to international outsourcing?

Arbeitspapier

We analyze unionized firms’ incentives to outsource intermediate goods production to foreign (low-cost) subcontractors. Such outsourcing leads to increased wages for the remaining in-house production. We find that stronger unions, which imply higher domestic wages, reduce incentives for international outsourcing. Though somewhat surprising, this result provides a theoretical reconciliation of the empirically observed trends of deunionization and increased international outsourcing in many countries. We further show that globalization – interpreted as either market integration or increased product market competition – will increase incentives for international outsourcing.

Object Details

• Alternative title: Führt der Rückzug der Gewerkschaften zur internationalen Auslagerung von Arbeitsplätzen?
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2006-23

Classification and Topics

• Classification: Wirtschaft ; Trade and Labor Market Interactions ; Trade Unions: Objectives, Structure, and Effects ; Contracting Out; Joint Ventures; Technology Licensing
• Subject: International outsourcing ; deunionization ; globalization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lommerud, Kjell Erik ; Meland, Frode ; Straume, Odd Rune
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/51141
• Last update: 10.03.2025, 11:42 AM CET