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International outsourcing when labour markets are unionized

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  • Jan Rose Skaksen
Abstract
. We consider the implications of international outsourcing in a simple general equilibrium model where the wage rate is the outcome of negotiations between a firm and a trade union. The effects of potential, but non‐realized, international outsourcing, is a reduction in the wage rate and an increase in employment. Aggregate welfare increases, but the trade union becomes worse off while owners of capital become better off. Realized international outsourcing gives rise to an increase in the wage rate and a reduction in employment. Aggregate welfare decreases, but the trade union becomes better off, while owners of capital become worse off. La sous‐traitance internationale quand les marchés du travail sont syndiqués. L’auteur considère les implications de la sous‐traitance internationale dans un modèle simple d’équilibre général où le taux de salaire est le résultat de négociations entre une entreprise et un syndicat de travailleurs. Les effets de sous‐traitance internationale potentielle mais non‐réalisée sont une réduction dans le taux de salaire et un accroissement dans le niveau d’emploi. Le niveau général de bien‐être s’accroît, mais les syndiqués voient leur situation se détériorer pendant que les propriétaires de capital voient leur situation s’améliorer. La sous‐traitance internationale réalisée entraîne un accroissement dans le taux de salaire et une réduction du niveau d’emploi. Le niveau général de bien‐être chute, mais la situation des syndiqués s’améliore alors que celle des propriétaires de capital se détériore.

Suggested Citation

  • Jan Rose Skaksen, 2004. "International outsourcing when labour markets are unionized," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(1), pages 78-94, February.
    • Handle: RePEc:wly:canjec:v:37:y:2004:i:1:p:78-94
    DOI: 10.1111/j.0008-4085.2004.004_1.x
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    References listed on IDEAS

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