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Timing is Everything - The Labour Market Effects of Union Wage Bargaining

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Author Info
Joerg Lingens () (University of Regensburg)
Abstract

This paper analyses the labour market effects of union wage bargaining for different sequences of the employment choice and the wage bargain. The result that collective bargaining decreases (firm-level) employment in a right-to-manage setting hinges on the assumption that employment is chosen by the firm after the wage bargain ("ex-ante" bargaining). Turning this sequence upside down ("ex-post" bargaining), the firm uses employment choice as a strategic variable for the wage bargain. Employment will be equal to the competitive case and wages will be higher. Although we strictly assume right-to-manage, the timing of the bargain ensures an efficient contract.

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File URL: http://economicsbulletin.vanderbilt.edu/2007/volume10/EB-07J50001A.pdf
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 10 (2007)
Issue (Month): 5 ()
Pages: 1-11
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:10:y:2007:i:5:p:1-11

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Related research
Keywords: right-to-manage; timing; Union wage bargaining;

Find related papers by JEL classification:
J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

References listed on IDEAS
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  1. Oswald, Andrew J., 1993. "Efficient contracts are on the labour demand curve : Theory and facts," Labour Economics, Elsevier, vol. 1(1), pages 85-113, June. [Downloadable!] (restricted)
    Other versions:
  2. Layard, Richard & Nickell, Stephen, 1990. "Is Unemployment Lower if Unions Bargain over Employment?," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 773-87, August. [Downloadable!] (restricted)
    Other versions:
  3. repec:cup:macdyn:v:5:y:2002:i:05:p:742-747_03 is not listed on IDEAS
  4. Grout, Paul A, 1984. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargining Approach," Econometrica, Econometric Society, vol. 52(2), pages 449-60, March. [Downloadable!] (restricted)
  5. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
  6. Cahuc, Pierre & Wasmer, Etienne, 2001. "Does Intrafirm Bargaining Matter In The Large Firm'S Matching Model?," Macroeconomic Dynamics, Cambridge University Press, vol. 5(05), pages 742-747, November. [Downloadable!]
  7. Stole, Lars A & Zwiebel, Jeffrey, 1996. "Organizational Design and Technology Choice under Intrafirm Bargaining," American Economic Review, American Economic Association, vol. 86(1), pages 195-222, March. [Downloadable!] (restricted)
  8. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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