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Market Size and Economic Integration when Labor Markets are Unionized

Author

Listed:
  • Andromachi S. Piperakis
  • Robert C. Hine
  • Peter W. Wright

Abstract

The paper explores the effects of economic integration on trade, wages, and welfare when market sizes differ. A duopoly model with two‐way intraindustry trade in similar products and with unionized labor markets is employed. It is confirmed that, for a wide range of different relative market sizes, integration leads to higher wages, employment, and welfare. However, where market sizes differ widely, the reduction of trade barriers leads to a reduction of wages, employment, and—in some circumstances—welfare in the country with the large market.

Suggested Citation

  • Andromachi S. Piperakis & Robert C. Hine & Peter W. Wright, 2003. "Market Size and Economic Integration when Labor Markets are Unionized," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 483-494, August.
    • Handle: RePEc:bla:reviec:v:11:y:2003:i:3:p:483-494
    DOI: 10.1111/1467-9396.00397
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    Cited by:

    1. Lommerud, Kjell Erik & Meland, Frode & Rune Straume, Odd, 2006. "Globalisation and union opposition to technological change," Journal of International Economics, Elsevier, vol. 68(1), pages 1-23, January.
    2. Bastos, Paulo & Kreickemeier, Udo & Wright, Peter, 2009. "Oligopoly, open shop unions and trade liberalisation," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 679-686, November.
    3. Peter W. Wright & Paulo Bastos, 2012. "Exchange Rates and Wages in Unionized Labor Markets," ILR Review, Cornell University, ILR School, vol. 65(4), pages 975-999, October.
    4. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.

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