Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/124925
Authors: 
Palokangas, Tapio K.
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9412
Abstract: 
I examine how globalization affects wages and welfare in a general equilibrium model of international trade with partly oligopolistic markets. Globalization is modeled as reducing trade costs or opening up shielded sectors to trade. There is a national or international common agency that determines minimum wages for the oligopolists, either directly or through supporting labor unions. The lobbies of employers and labor unions influence that agency, relating their prospective political contributions to the latter's decisions. Both a shift from national to international regulation and a decrease in trade costs promote aggregate welfare, but decrease open-sector relative wages.
Subjects: 
globalization
international trade
common agency
regulation
labor unions
JEL: 
C72
F16
J51
Document Type: 
Working Paper

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