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Insider Power, Outsider Ineffectiveness and Product Market Competition: Evidence from Australia

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  • Dobbie, Michael

Abstract

Insider-outsider theories have been advanced to explain a range of phenomena, principally the persistence of unemployment. This paper uses data from the Australian Workplace Industrial Relations Survey 1995, and regional labour force survey data, to test this model. The paper also examines how the extent of product market competition faced by a firm influences the ability of insiders to ignore outsiders in wage setting. The paper finds provisional support for the insider-outsider distinction, and for the idea that insider power is enhanced when product market competition is weak.

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File URL: http://purl.umn.edu/50280
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Bibliographic Info

Article provided by Review of Applied Economics in its journal Review of Applied Economics.

Volume (Year): 2 (2006)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:ags:reapec:50280

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Web page: http://www.lincoln.ac.nz/story11874.html

Related research

Keywords: insiders; outsiders; product market competition; Demand and Price Analysis; J3; J4; J6;

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References

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  1. Kennedy, S. & Borland, J., 1997. "A wage Curve for Australia?," CEPR Discussion Papers 372, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis in Unemployment," NBER Working Papers 2035, National Bureau of Economic Research, Inc.
  3. Groenewold, Nicolaas & Taylor, Leanne, 1992. "Insider Power as a," The Economic Record, The Economic Society of Australia, vol. 68(200), pages 57-64, March.
  4. Stephen Nickell & D Nicolitsas, 1994. "Wages," CEP Discussion Papers dp0219, Centre for Economic Performance, LSE.
  5. Nickell, S & Vainiomaki, J & Wadhwani, S, 1994. "Wages and Product Market Power," Economica, London School of Economics and Political Science, vol. 61(244), pages 457-73, November.
  6. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," Working papers 427, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Roed, Knut, 1997. " Hysteresis in Unemployment," Journal of Economic Surveys, Wiley Blackwell, vol. 11(4), pages 389-418, December.
  8. Gregory, R G, 1986. "Wages Policy and Unemployment in Australia," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S53-74, Supplemen.
  9. Paul Flatau & Philip E. T. Lewis & Allison Rushton, 1991. "The Macroeconomic Consequences of Long-Term Unemployment," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 24(4), pages 48-56.
  10. Assar Lindbeck & Dennis J. Snower, 2001. "Insiders versus Outsiders," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 165-188, Winter.
  11. Wooden, Mark & Bora, Bijit, 1999. "Workplace Characteristics and Their Effects on Wages: Australian Evidence," Australian Economic Papers, Wiley Blackwell, vol. 38(3), pages 276-89, September.
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