International Economics and Economic Policy

, Volume 13, Issue 2, pp 223–232 | Cite as

The labor market effects of trade unions in an open economy: Layard meets Melitz

  • Marco de Pinto
  • Jochen Michaelis
Original Paper


Trade unions are typically able to convert their industrial power into political power. We show that, depending on the constellation of parameters, stronger trade unions may improve welfare in terms of an increase in aggregate employment and output if they successfully lobby for lower trade barriers set by the government.


Trade unions Lobbying Trade liberalization 



We thank an anonymous referee for very insightful comments. The paper also benefited from comments by Laszlo Goerke, Xenia Matschke, Carsten Eckel, Gerald Willmann, Benjamin Jung, and from participants at conferences in Göttingen and Trier.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Institute for Labour Law and Industrial Relations in the European Union (IAAEU)University of TrierTrierGermany
  2. 2.Department of EconomicsUniversity of KasselKasselGermany

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