کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
971851 | 1479716 | 2013 | 8 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Trade cost reduction, subcontracting and unionised wage Trade cost reduction, subcontracting and unionised wage](/preview/png/971851.png)
We show the effects of trade cost reduction in the presence of a domestic firm's strategic output allocation between formal in-house production and subcontracting to the informal sector. Considering a one-way trade, we show that trade cost reduction increases the in-house unionised wage, in-house employment, union utility, the formal–informal wage gap and consumer surplus, it reduces informal production and the profit of the domestic firm, and it creates an ambiguous effect on welfare. Whether trade cost reduction increases the income gap between the domestic producer and the labour union is ambiguous, and depends on the trade cost and the cost of subcontracting. Considering a two-way trade with symmetric segmented markets, we show that a symmetric trade cost reduction reduces the domestic unionised wage, domestic in-house employment, union utility, it increases informal production, consumer surplus and it creates ambiguous effects of the profits.
► We show the effects of a trade cost reduction in a one-way trade.
► The domestic firm allocates production between formal and informal productions.
► Several new results are obtained.
► We also show the implications of a symmetric trade cost reduction in a two-way trade.
Journal: Labour Economics - Volume 21, April 2013, Pages 103–110