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Import Competition and Worker Productivity in Unionized Firms

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  • Neil Campbell
  • Neil Vousden

Abstract

This paper analyzes the effects of trade and labor market liberalization on wages and worker productivity/effort in a domestic unionized firm with firm‐union bargaining over wages and effort. It is shown that both types of liberalization will induce a ‘cold shower effect’ (a rise in effort) if the union’s objective function is more heavily weighted towards employment. However, the welfare effects of the two policies can differ markedly. The paper also identifies a separate productivity cost of protection associated with the distortionary effect of protection on worker effort.

Suggested Citation

  • Neil Campbell & Neil Vousden, 2000. "Import Competition and Worker Productivity in Unionized Firms," Review of International Economics, Wiley Blackwell, vol. 8(2), pages 193-207, May.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:2:p:193-207
    DOI: 10.1111/1467-9396.00215
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    Cited by:

    1. Chapda Nana, Guy & Larue, Bruno & Gervais, Jean-Philippe, 2012. "Regional integration and dynamic adjustments: Evidence from gross national product functions for Canada and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 23(2), pages 246-264.

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