Impact of trade liberalization on bargaining power of labor

Wage share gives a measure of how the benefits of growth are shared between labor and capital and is an indicator of worker's bargaining power in the economy. When growth in wages of labor rises more than the rise in GDP then we can say that wage share is rising in the economy implying that labor has more bargaining power than capital. Wage share depends on a number of factors. This paper aims to study how with trade openness the wage share changes over time. For my analysis I have taken six developed countries: France, Italy, Japan, UK, US and Canada and three developing also called emerging economies: Brazil, China and India. From my analysis it is clear that for almost all countries the wage share has declined with trade openness. However, for Brazil there is a slight increase in wage share with trade openness.