Template-Type: ReDIF-Paper 1.0

Author-Name: Hartmut Egger
Author-X-Name-First: Hartmut
Author-X-Name-Last: Egger

Author-Name: Daniel Etzel
Author-X-Name-First: Daniel
Author-X-Name-Last: Etzel

Title: The Impact of Trade on Employment, Welfare, and Income Distribution in Unionized General Oligopolistic Equilibrium
   
	
Abstract: This paper sets up a general oligopolistic equilibrium model with unionized labor markets. By accounting for productivity dierences, the model features prot and wage dierentials across industries. We use this setting to study the impact of trade liberalization on employment, welfare, and the distribution of income. In particular, we show that a movement from autarky to free trade with a symmetric partner country lowers union wage claims and therefore stimulates employment and raises welfare. Whether rms can extract a larger share of rents in the open economy depends on the competitive environment as well as on the degree of centralization in union wage setting. Finally, the distribution of proft income across firm owners remains unaffected, while the distribution of wage income becomes more equal when a country opens up to trade.

Length:  33 pages
Creation-Date:  2010-01
File-URL: http://www.bgpe.de/texte/DP/088_egger.pdf
File-Format: Application/pdf
File-Function: First version, 2009
Number: 088
Classification-JEL: F12, F16, J51, L13
Keywords: General oligopolistic equilibrium, Unionized labor market, Trade liberalization, Income distribution
Handle: RePEc:bav:wpaper:088_egger