Working Paper: NBER ID: w2514
Authors: Robert V. Staiger
Abstract: This paper examines the interaction between union wages and the international pattern of production and trade. If union goods are heterogeneous in labor intensity, the introduction of an active union in the domestic country causes only the least labor-intensive range of union goods to be produced there, with goods of greatest labor intensity produced abroad due to the relatively high cost of domestic union Labor. A narrowing of the scope of domestic union production will eliminate relatively labor-intensive goods, leading a rent-maximizing union to raise its union premium. The implications of this union behavior for comparative statics results are considered.
Keywords: labor unions; international trade; wage premium
JEL Codes: J51; F11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Domestic union introduction (J12) | Production of least labor-intensive goods domestically (L23) |
| Domestic union introduction (J12) | Production of more labor-intensive goods abroad (F16) |
| Narrowing of domestic production (L69) | Rent-maximizing union raises wage premium (J39) |
| Rent-maximizing union raises wage premium (J39) | Affects international trade dynamics (F69) |