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The British Docks: A Test of Alternative Models of Wage and Employment Determination

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  • Andrea Gavosto

Abstract

In this paper we compare two well‐known models of union bargaining: labour demand and efficient bargains. We use data on the British docks which belonged to the national Dock Labour Board, abolished in 1989. The docks industry is particularly well‐suited for a test of the competing models: in fact it had a long tradition of union bargaining on manning levels and, at the same time, it experienced a long‐run decline in employment. Also, jobless dockers were granted some form of unemployment compensation. The institutional features of the industry allow to test a strong version of the efficient bargain model, where the union equates the utility of those who work and those who do not. Our evidence supports the strong efficiency hypothesis: employment depends only on the opportunity cost of working. The secular decline in employment in the industry is explained mainly by technological progress, i.e. the introduction of containers.

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  • Andrea Gavosto, 1997. "The British Docks: A Test of Alternative Models of Wage and Employment Determination," LABOUR, CEIS, vol. 11(2), pages 225-248, June.
    • Handle: RePEc:bla:labour:v:11:y:1997:i:2:p:225-248
    DOI: 10.1111/1467-9914.00035
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    Cited by:

    1. Thorsten Upmann & Julia Müller, 2014. "The Structure of Firm-Specific Labour Unions," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(2), pages 336-364, June.
    2. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    3. repec:pri:indrel:dsp01cc08hf62w is not listed on IDEAS

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