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Exchange Rates and Wages in Unionized Labor Markets

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  • Peter W. Wright
  • Paulo Bastos

Abstract

The authors investigate the impact of exchange rate movements on wage determination in unionized labor markets. Using a simple model of international oligopoly, the authors show that organized labor has a rational incentive to accept lower wages in the face of a currency appreciation. They examine this proposition empirically using a matched worker-firm data set for Portugal and, though the impact varies considerably with worker characteristics, find results consistent with the predictions of the model.

Suggested Citation

  • 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.
    • Handle: RePEc:sae:ilrrev:v:65:y:2012:i:4:p:975-999
    DOI: 10.1177/001979391206500409
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    Cited by:

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    3. Paulo Bastos & Joana Silva & Rafael Proença, 2016. "Exports and Job Training," Review of International Economics, Wiley Blackwell, vol. 24(4), pages 737-756, September.
    4. Bridgman, Benjamin, 2015. "Competition, work rules and productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 136-149.
    5. Andini, Corrado, 2014. "Fixed Exchange-Rate Policy and Real Wage Growth: Quasi-Experimental Evidence," IZA Discussion Papers 8701, Institute of Labor Economics (IZA).

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