This paper uses a simple theory of union behavior to examine the consequences of unionization for the basic comparative-statics properties of the specific-factors and Heckscher-Ohlin trade models. Many of the standard results continue to emerge despite the union. However, in contrast to the competitive theory, an increase in the price of the unionized commodity can unambiguously lower the real wages of union workers in the short run and, in the long run, can raise the real rewards of all factors employed in the union sector.
ASJC Scopus subject areas
- Economics and Econometrics