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The Effects of Trade on Labour Markets Under Conditions of Globalisation

The project focuses chiefly on the analysis the effects of trade on labour markets under conditions of globalisation. The CSGR Working Paper arising from the project marks the first attempt to link the theory to the issue of the appropriate empirical methodology. It demonstrates that the impact of falling trade costs on unionised labour markets depends on the nature of the trade regime; and, in particular, whether trade is one-way or two-way. The relationship is complicated because the nature of the trade regime is itself influenced by union behaviour, and union behaviour is affected by trade costs. This endogenous determination has major implications for the empirical analysis of the effect of trade on labour markets. This is further complicated by the fact that the crucial level of trade costs, which induces 'switches' in union behaviour is not an observable economic variable. Thus the paper attempts to indicate the kind of variables which might determine the switching level of trade costs in order to make the theoretical model empirically implementable. A paper from the project, 'Endogenous Determination of Trade Regime and Bargaining Outcome', was presented at a number of conferences and seminars in 1999.






Robin Naylor and Michele Santoni, "Foreign Direct Investment and Wage Bargaining", CSGR Working Paper 41/99, October 1999, Abstract, Full Document PDF icon


Robin Naylor, "Endogenous Determination of Trade Regime and Bargaining Outcome", CSGR Working Paper 40/99, October 1999, Abstract, Full Document PDF icon