The bargaining position of low-skilled and high-skilled workers in a globalising world |
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| Authors: | Michel Dumont Glenn Rayp Peter Willemé |
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| Institution: | 1. Institute of Applied Economics, National Taiwan Ocean University, No. 2, Beining Road, Jhongjheng District, Keelung City 202, Taiwan;2. Department of Economics, Washington University in St. Louis, One Brookings Drive, St. Louis, MO 63130, United States;3. Department of Economics, National Taiwan University, No. 1, Sector 4, Roosevelt Road, Taipei City 106, Taiwan;1. Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu 611130, China;2. Department of Economics, Clark University, 950 Main Street, Worcester, MA 01610, USA;3. Department of Economics, Clark University and IZA, Germany, 950 Main Street, Worcester, MA 01610,\nUSA |
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| Abstract: | This paper extends the assessment of the impact of globalisation and technological change on the bargaining power and preferences of employees, by taking worker heterogeneity into account. In contrast with previous studies, two separate unions – representing low-skilled and high-skilled workers respectively – are considered. Using Belgian firm-level data, labour bargaining power and relative wage preference have been estimated by skill level. When these estimates are subsequently regressed on a set of potential determinants, the bargaining power of low-skilled workers appears to fall with imports and offshoring, whereas the bargaining power of high-skilled workers is only positively affected by R&D activities. In addition, a significant effect of globalisation is found on the relative preference of unions for wages over employment, indicating that the effect of globalisation on the behaviour of labour unions is more encompassing than frequently assumed. |
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