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How Bad is Globalization for Labour Standards in the North?

Author

Listed:
  • Alejandro Donado
  • Klaus Wälde

Abstract

We analyse a world consisting of ’the North’ and ’the South’ where labour standards in the North are set by trade unions. Standards set by unions tend to increase output and welfare. There are no unions in the South and work standards are suboptimal. Trade between these two countries can imply a reduction in work standards in the North. Moreover, when trade unions are established in the South, the North, including northern unions, tends to lose out. Quantitatively, these effects are small and overcompensated for by gains in the South. The existing empirical literature tends to support our findings.

Suggested Citation

  • Alejandro Donado & Klaus Wälde, 2010. "How Bad is Globalization for Labour Standards in the North?," FIW Working Paper series 059, FIW.
    • Handle: RePEc:wsr:wpaper:y:2010:i:059
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    More about this item

    Keywords

    occupational health and safety; trade unions; international trade; welfare;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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