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The bargaining position of low-skilled and high-skilled workers in a globalising world

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  • Dumont, Michel
  • Rayp, Glenn
  • Willemé, Peter

Abstract

This paper extends the assessment of the impact of globalisation and technological change on the bargaining power and preferences of employees, by taking worker heterogeneity into account. In contrast with previous studies, two separate unions – representing low-skilled and high-skilled workers respectively – are considered. Using Belgian firm-level data, labour bargaining power and relative wage preference have been estimated by skill level. When these estimates are subsequently regressed on a set of potential determinants, the bargaining power of low-skilled workers appears to fall with imports and offshoring, whereas the bargaining power of high-skilled workers is only positively affected by R&D activities. In addition, a significant effect of globalisation is found on the relative preference of unions for wages over employment, indicating that the effect of globalisation on the behaviour of labour unions is more encompassing than frequently assumed.

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  • Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
    • Handle: RePEc:eee:labeco:v:19:y:2012:i:3:p:312-319
    DOI: 10.1016/j.labeco.2012.02.005
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    Cited by:

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    2. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    3. Lionel Nesta & Stefano Schiavo, 2018. "International Competition and Rent Sharing in French Manufacturing: A Firm-Level Analysis," EconPol Working Paper 19, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Cardullo, Gabriele & Conti, Maurizio & Sulis, Giovanni, 2015. "Sunk capital, unions and the hold-up problem: Theory and evidence from cross-country sectoral data," European Economic Review, Elsevier, vol. 76(C), pages 253-274.
    5. Kostøl, Fredrik B. & Svarstad, Elin, 2023. "Trade Unions and the Process of Technological Change," Labour Economics, Elsevier, vol. 84(C).
    6. Alessia Matano & Paolo Naticchioni & Francesco Vona, 2019. "“The Institutional Adjustment Margin to Import Competition: Evidence from Italian Minimum Wages”," IREA Working Papers 201905, University of Barcelona, Research Institute of Applied Economics, revised Apr 2019.
    7. Palokangas, Tapio K., 2017. "Labor Market Regulation, International Trade and Footloose Capital," IZA Discussion Papers 10468, Institute of Labor Economics (IZA).
    8. Stefano Schiavo & Lionel Nesta, 2017. "International Competition and Rent Sharing in French Manufacturing," DEM Working Papers 2017/07, Department of Economics and Management.
    9. Ana Cristina Soares, 2020. "Price-cost margin and bargaining power in the European Union," Empirical Economics, Springer, vol. 59(5), pages 2093-2123, November.
    10. Wen Ci & Feng Hou & René Morissette, 2018. "Acquisition of permanent residence by temporary foreign workers in Canada: a panel study of labour market outcomes before and after the status transition," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-24, December.
    11. Zens, Gregor & Böck, Maximilian & Zörner, Thomas O., 2020. "The heterogeneous impact of monetary policy on the US labor market," Journal of Economic Dynamics and Control, Elsevier, vol. 119(C).
    12. Wolcott, Erin L., 2021. "Employment inequality: Why do the low-skilled work less now?," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 161-177.
    13. Cristina Fernández & Aitor Lacuesta & José Manuel Montero & Alberto Urtasun, 2015. "Heterogeneity of markups at the firm level and changes during the great recession: the case of spain," Working Papers 1536, Banco de España.
    14. Palokangas, Tapio K., 2014. "The Political Economy of Labor Market Regulation with R&D," IZA Discussion Papers 8147, Institute of Labor Economics (IZA).
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    16. Robert Anderton & Paul Hiebert, 2009. "The Impact of Globalisation on the Euro Area Macroeconomy," Discussion Papers 09/14, University of Nottingham, GEP.
    17. Bart Hertveldt & Bernhard Michel, 2013. "Offshoring and the Skill Structure of Labour Demand in Belgium," De Economist, Springer, vol. 161(4), pages 399-420, December.
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    20. Lutz Arnold & Stefanie Trepl, 2015. "A North-South Trade Model of Offshoring and Unemployment," Open Economies Review, Springer, vol. 26(5), pages 999-1039, November.
    21. Zhuofei Lu & Senhu Wang & Yaojun Li & Xiyuan Liu & Wendy Olsen, 2023. "Who Gains Mental Health Benefits from Work Autonomy? The Roles of Gender and Occupational Class," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(4), pages 1761-1783, August.
    22. Zhuofei Lu & Senhu Wang & Wendy Olsen, 2023. "Revisiting the ‘flexibility paradox’: degree of work schedule flexibility and time use patterns across gender and occupational groups," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
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    24. Palokangas, Tapio K., 2015. "The Welfare Effects of Globalization with Labor Market Regulation," IZA Discussion Papers 9412, Institute of Labor Economics (IZA).
    25. Matsui, Muneya & Yoshimi, Taiyo, 2015. "Macroeconomic dynamics in a model with heterogeneous wage contracts," Economic Modelling, Elsevier, vol. 49(C), pages 72-80.

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