Document Type

Article

Publication Date

10-15-1994

Keywords

NAFTA, union workers, unions, international trade

Abstract

Union opposition to free trade policies suggests that international trade damages the union movement. Previous research has found little relationship between union wages and international trade. However, greater trade may hinder unions by reducing the likelihood that workers enter the union sector. A bivariate partial observability probit model is used to predict union choice with respect to risk aversion, union strategic behavior, and product market effects of trade. The model estimates the probability of workers entering the union sector queue and the probability of being hired from the union queue. The results suggest that trade has had some adverse effects on union choice, but it is exports rather than imports that have the greatest negative impact on unions. Sectorial results show that high technology sector workers have a high likelihood of union choice, ceteris paribus, which acts to offset the adverse impact of trade. Finally, the empirical evidence implies that most of the determination of individual union status is due to firm behavior, not due to characteristics of the individual worker.

Publisher

Department of Economics, South Dakota State University

Series Number

94-13

Number of Pages

27

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