Resource title

Product Market Integration, Comparative Advantages and Labour Market Performance

Resource image

image for OpenScout resource :: Product Market Integration, Comparative Advantages and Labour Market Performance

Resource description

In a two-country model with trade driven by comparative advantages, it is considered how imperfectly competitive labour markets are affected by lower frictions in international goods trade. Easier goods trading is equivalent to increased mobility of employment across countries and thus a change in the trade-off between wages and employment faced by wage setters. While the effects of product market integration on the trade-off between wages and employment in general is ambiguous, it is shown that product market integration works like a general improvement in productivity via the specialization it allows through trade. Unambiguously, real wages and employment and welfare improve upon reductions in trade frictions, and therefore workers are better off irrespective of whether the market power of unions is enhanced or muted.

Resource author

Torben M. Andersen, Jan Rose Skaksen

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20639

Resource license

Adapt according to the presented license agreement and reference the original author.