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The sustainability of unions' wage coordination in an integrated economy

Author

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  • Domenico Buccella

Abstract

In a two-country duopoly model with integrated product markets, this paper investigates the incentives for unions to coordinate wage demands in the presence of transaction costs, and the sustainability of unions' wage collusion. Contrary to conventional wisdom that wage collusion is always welfare-detrimental, this work shows that wage coordination in the presence of low minimum wages may lead, from a social point of view, to a Pareto superior outcome with respect to separate wage settings with relatively high minimum wages.

Suggested Citation

  • Domenico Buccella, 2013. "The sustainability of unions' wage coordination in an integrated economy," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 5(1), pages 53-75.
    • Handle: RePEc:ids:ijsuse:v:5:y:2013:i:1:p:53-75
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    Cited by:

    1. Ruben Perez-Sanz, 2024. "International monopoly union coordination under the presence of externalities and costs," International Economics and Economic Policy, Springer, vol. 21(1), pages 181-205, February.

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