How Bad is Globalization for Labour Standards in the North?
Gutenberg School of Management and Economics Discussion Paper No. 1011
29 Pages Posted: 10 Sep 2010
Date Written: August 19, 2010
We analyse a world consisting of 'the North' and 'the South' where labour standards in the North are set by trade unions. Standards set by unions tend to increase output and welfare. There are no unions in the South and work standards are suboptimal. Trade between these two countries can imply a reduction in work standards in the North. Moreover, when trade unions are established in the South, the North, including northern unions, tend to lose. Quantitatively, these effects are small and overcompensated by gains in the South. The existing empirical literature tends to support our findings.
Keywords: occupational health and safety, trade unions, international trade, welfare
JEL Classification: J51, J81, F16, F21
Suggested Citation: Suggested Citation