Premium
Import Competition and Worker Productivity in Unionized Firms
Author(s) -
Campbell Neil,
Vousden Neil
Publication year - 2000
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00215
Subject(s) - productivity , economics , labour economics , welfare , competition (biology) , free trade , liberalization , international economics , market economy , macroeconomics , ecology , biology
This paper analyzes the effects of trade and labor market liberalization on wages and worker productivity/effort in a domestic unionized firm with firm‐union bargaining over wages and effort. It is shown that both types of liberalization will induce a ‘cold shower effect’ (a rise in effort) if the union’s objective function is more heavily weighted towards employment. However, the welfare effects of the two policies can differ markedly. The paper also identifies a separate productivity cost of protection associated with the distortionary effect of protection on worker effort.