Global Firms, (de)unionization and Wage Inequality

Abstract This paper studies the simultaneous effects of relocation production (as part globalization) and institutions on intra- inter-country wage inequality. Firstly, empirical evidence shows that labor unions act at decreasing inequality, but this shrinking effect tends to be mitigated by globalization. Theoretically, we study conditions under which is verified. Unskilled labor-intensive relocations together with (de)unionization processes force contributed increasing path intra-country inequality observed in some leading countries. However, most recently, skilled may help decrease countries (e.g., US), increase it follower China).