International Competition and the Unionized Sector
1983 (English)Report (Other academic)
In this paper I study the wage and employment behavior of a unionized sector that is confronted by an intensification of international competition. After developing a formal model of a monopoly union subject to majority rule, I study the response of a unionized ssector operating under a seniority system for layoffs and rehires to a trend decrease in the international price of its output. Conditions are provided to validate the casual argument that majority voting in unions and the seniority system together provide an explanation for the lack of union wage adjustment. In order to highlight the role of seniority rules per se, I compare the wage response derived from the model to that which obtains when the layoff queue is determined by a random draw.
Place, publisher, year, edition, pages
Stockholm: IIES , 1983. , 42 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 251
IdentifiersURN: urn:nbn:se:su:diva-41482OAI: oai:DiVA.org:su-41482DiVA: diva2:330447
Published in connection with a visit at the IIES2010-07-152010-07-152010-07-15