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Article Dans Une Revue Journal of International Economics Année : 2009

Do capital market and trade liberalization trigger labor market deregulation?

Hervé Boulhol
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Résumé

Over the past decades, product market deregulation has typically preceded labor market reforms in OECD countries. This paper incorporates labor market rigidities in a model of footloose capital in order to study how globalization might affect the trade-offs generated by labor market regulation and put pressure on labor market institutions. In this two-sector model, globalization ultimately reduces labor market rigidities through either one of two channels: capital mobility triggers a re-allocation of resources, which trade integration amplifies, away from the high-rent / highly-unionized sector; the threat of costly relocations encourages labor market deregulation. The latter channel is more efficient because it avoids sub-optimal sectoral specialization.

Dates et versions

hal-03015053 , version 1 (19-11-2020)

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Hervé Boulhol. Do capital market and trade liberalization trigger labor market deregulation?. Journal of International Economics, 2009, 77 (2), pp.223-233. ⟨10.1016/j.jinteco.2008.12.001⟩. ⟨hal-03015053⟩
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