Union Behavior, Industry Rents, and Optimal Policies

Download or read book Union Behavior, Industry Rents, and Optimal Policies written by Mr.Phillip Swagel and published by International Monetary Fund. This book was released on 1996-12-01 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the supposed welfare gains from strategic trade and industrial policies in the U.S. steel industry. Strategic policies to capture labor rents lead to an endogenous response which greatly diminishes their importance. On the other hand, reducing domestic labor market distortions results in welfare gains nearly as large as those from optimal trade and industrial policies. The paper concludes that the focus on labor rents as the subject of U.S. trade and industrial policy is overstated, at least in manufacturing industries such as integrated steel.