Unemployment and wages and centralization in wage bargaining: Some analytical explanations

Ana Paula MARTINS

Abstract


Abstract. This paper discusses the relation between centralization in union bargaining and the wage-(un)employment mix. Empirical findings point to a positive relation between the degree of coordination in union bargaining and wages till a certain point, and a negative one afterwards. A theoretical argument fits such evidence, relying on the mechanism behind the free-rider problem in union bargaining. If earnings taxes were introduced to finance the unemployment insurance fund, that relation could change. The impact on the equilibrium wages and multipliers in the several scenarios is briefly explored. Indirectly, an explanation for the shape of the empirical “wage curve” is also derived.

Keywords. Monopoly unions, Wage determination models, Union bargaining, Corporatism, Wage curve, Unemployment insurance.

JEL. J51, J65, E24, E62, H55, H39, D42, D43.

Keywords


Monopoly unions; Wage determination models; Union bargaining; Corporatism; Wage curve; Unemployment insurance.

Full Text:


References


Blanchflower, D.G., & Oswald, A.J. (1994). The Wage Curve. M.I.T. Press, Cambridge.

Calmfors, L., & Driffill, J. (1988). Bargaining structure, corporatism and macroeconomic performance. Economic Policy, 3(6), 13-61. doi. 10.2307/1344503

Carlin, W., & Soskice, D. (1990) Macroeconomics and the Wage Bargain. Oxford University Press.

Davidson, C. (1988). Multiunit bargaining in oligopolistic industries. Journal of Labor Economics, 6(3), 397-422. doi. 10.1086/298189

Dowrick, S. (1993). Enterprise bargaining, union structure and wages. Economic Record, 69(4), 393-404. doi. 10.1111/j.1475-4932.1993.tb02120.x

Dowrick, S. (1989). Union-oligopoly bargaining. Economic Journal, 99(398), 1123-1142. doi. 10.2307/2234092

Feldstein, M. (1976). Temporary layoffs in the theory of unemployment. Journal of Political Economy, 84(5), 937-956. doi. 10.1086/260491

Flanagan, R.J. (1999). Macroeconomic performance and collective bargaining: An international perspective. Journal of Economic Literature, 37(3), 1150-1175. doi. 10.1257/jel.37.3.1150

Hart, R.A., & Moutos, T. (1995). Human Capital, Employment and Bargaining. Cambridge University Press.

Holmlund, B., & Lundborg, P. (1989). Unemployment insurance schemes for reducing the natural rate of unemployment. Journal of Public Economics, 38(1), 1-15. doi. 10.1016/0047-2727(89)90008-X

Layard, R., Nickell, S., & Jackman, R. (1991). Unemployment: Macroeconomic Performance and the Labour Market. Oxford University Press.

Oswald, A.J. (1982). Trade unions, wages and unemployment: What can simple models tell us?. Oxford Economic Papers, 34(3), 526-545. doi. 10.1093/oxfordjournals.oep.a041569

Tantarelli, E. (1986). The regulation of inflation and unemployment. Industrial Relations, 25(1), 1-15. doi. 10.1111/j.1468-232X.1986.tb00664.x




DOI: http://dx.doi.org/10.1453/jepe.v6i1.1829

Refbacks

  • There are currently no refbacks.


Bookmark and Share


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics and Political Economy - J. Econ. Pol. Econ. - JEPE - www.kspjournals.org

ISSN: 2148-8347

Editor: [email protected]   Secretarial: [email protected]   Istanbul - Turkey.

Copyright © KSP Library