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Competition, work rules and productivity

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  • Bridgman, Benjamin

Abstract

I develop a theory to explain why workers want restrictive work rules, those that induce wages to be paid for non-productive labor hours, and why competition reduces them. Work rules allow workers to maintain both high levels of employment and wages. They generate a fixed payment that transfers the firm׳s surplus to workers, which wages alone cannot do, making them robust to alternative modeling assumptions. Competition loosens work rules by reducing the firm׳s surplus, which increases productivity.

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  • Bridgman, Benjamin, 2015. "Competition, work rules and productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 136-149.
    • Handle: RePEc:eee:dyncon:v:52:y:2015:i:c:p:136-149
    DOI: 10.1016/j.jedc.2014.12.008
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    1. Labor Unions and the Rust Belt
      by afinetheorem in A Fine Theorem on 2014-11-05 03:46:39

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    3. Benjamin Bridgman & Shi Qi & James A. Schmitz, 2015. "Cartels Destroy Productivity: Evidence from the New Deal Sugar Manufacturing Cartel, 1934-74," Staff Report 519, Federal Reserve Bank of Minneapolis.
    4. Stefano Comino & Alberto Galasso & Clara Graziano, 2020. "Market Power and Patent Strategies: Evidence from Renaissance Venice," Journal of Industrial Economics, Wiley Blackwell, vol. 68(2), pages 226-269, June.
    5. Xu, Jing, 2022. "Competition and equilibrium effort choice," Journal of Economic Dynamics and Control, Elsevier, vol. 137(C).
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    8. Simeon Alder & David Lagakos & Lee Ohanian, 2014. "Competitive Pressure and the Decline of the Rust Belt: A Macroeconomic Analysis," NBER Working Papers 20538, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Competition; Productivity; Restrictive work rules; Labor unions;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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