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Union Membership with Import Liberalization

Authors: Stephen B. Blumenfeld, Aaron Crawford, Andres G. Victorio


New Zealand-s product markets experienced a surge in import competition beginning from the late 1970-s when its government began to promote a policy of more open markets. This study considers how the trade liberalization aspect of the policy may have influenced unionization and union-organizing success. For describing the trade liberalization, a model shows how the removal of import tariffs can lead to countervailing influences upon the union membership of a domestic firm. The evidence supports the prediction that union membership has been decreased rather than increased. In the context of debates concerning globalization, it can be said that the power of unions has been diminished.

Keywords: Imports, tariffs, unions, wages.

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