Trade Liberalization, Collective Bargaining and Workers: Wages and Working Conditions
Bastien Alvarez
Gianluca Orefice
Farid Toubal
Bastien Alvarez
Gianluca Orefice
Farid Toubal

- Workers in regions that face large export liberalization shocks are more likely to work on temporary contracts and non-standard hours.
- This effect is magnified for unskilled (production) workers.
- Import trade liberalization has weak (null) effect on working conditions, but in line with previous literatue has negative effect on wages.

This paper examines how trade liberalization-induced labor demand shocks affect wages and non-wage working conditions. Using exogenous trade shocks from EU enlargement and worker-level data, we find that export liberalization increases temporary contracts and atypical work schedules, particularly for production workers. However, it has no significant effect on wages, which may reflect firms’ ability to expand employment without raising pay due to labor supply elasticity and unemployment. Import liberalization weakly affects working conditions but, consistent with previous studies, lowers wages as firms face stronger competition and reduced labor demand.


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