Union Power, Replacement and Labour Market Dynamics
AbstractIn this paper, we construct a new basis for insider--outsider theory that acknowledges that insiders are typically easier to organise, so that they can delegate their bargaining decisions to a representative if they want to. We show that harassment or discrimination of new workers by the insider work force is neither individually rational nor needed to explain union formation or inefficient hiring decisions. However, we show that there is a strong tendency for overemployment. Unions tend to increase the efficiency of hiring decisions although union contracts will look like inducing underemployment. Copyright 2002 Royal Economic Society
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 112 (2002)
Issue (Month): 479 (April)
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