OPPOSITION TO TECHNOLOGICAL CHANGE

Globalisation and union opposition to technological change∗ Kjell Erik Lommerud†, Frode Meland‡, Odd Rune Straume§ We find that trade unions have a rational incentive to oppose the adoption of labour-saving technology when labour demand is inelastic and unions care much for employment relative to wages. Trade liberalisation typically increases trade union technology opposition. These conclusions are reached in a model of interna-tional duopoly with monopoly wage setting in one of the coun-tries, and two-way trade. An important stepping stone for the result is to note that even though trade liberalisation means a tougher competitive environment for firms, labour demand tends to increase. We also find that the incentive for technology oppo-sition is stronger in the more technologically advanced country and in the country with the larger home market, complementing earlier explanations for technological catch-up and leapfrogging