Import Competition and Worker Productivity in Unionized Firms

Neil Vousden, Neil Campbell

    Research output: Contribution to journalArticle

    Abstract

    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.
    Original languageEnglish
    Pages (from-to)193-207
    JournalReview of International Economics
    Volume8
    Publication statusPublished - 2000

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