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How do Bureaucratic Budget Competition and Collective Bargaining Affect the Share of Temporary Employment?

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  • Michele Santoni

Abstract

This paper will present a two-period model in which two bureau-union units, due to the presence of a tenured labour constraint, negotiate sequentially over employment and wages, under the hypotheses that the bureaus maximise output and the sponsor can commit itself to an overall budget. The paper will show that, when both tenured and temporary workers are essential in production, the extent and strength of collective bargaining power of unionised permanent workers, jointly with bureaucratic strategic incentives in budget competition, will determine a suboptimal allocation of inputs. As a result, strategic over-hiring of permanent workers may emerge in symmetric equilibrium.

Suggested Citation

  • Michele Santoni, 2023. "How do Bureaucratic Budget Competition and Collective Bargaining Affect the Share of Temporary Employment?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 179(2), pages 381-411.
    • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2023-0025
    DOI: 10.1628/jite-2023-0025
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    More about this item

    Keywords

    bureaucracy; permanent and temporary employment; public administration; trade unions;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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