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Strike and Lock-Out Threats and Fiscal Policy

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  • Lindbeck, Assar
  • Snower, Dennis J

Abstract

This paper suggests that a union's wage demands are not merely the outcome of maximizing the union's utility function subject to a labor-demand or minimum-profit constraint as the standard models of union behavior suggest, but tha t these wage demands also depend on the cost which the union can impo se on the firm through a strike and on the credibility of the strike threat. The firm, in turn, can affect the above costs by imposing a l ock out. The paper presents a model of wage formation under strike and lock-out threats and explores the implications for the effectiveness of fiscal policy. Copyright 1987 by Royal Economic Society.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 39 (1987)
Issue (Month): 4 (December)
Pages: 760-84

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Handle: RePEc:oup:oxecpp:v:39:y:1987:i:4:p:760-84

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Cited by:
  1. Brown, Alessio J G & Merkl, Christian & Snower, Dennis J., 2007. "Comparing the Effectiveness of Employment Subsidies," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6334, C.E.P.R. Discussion Papers.
  2. Karanassou, Marika & Snower, Dennis J., 2000. "Characteristics of Unemployment Dynamics: The Chain Reaction Approach," IZA Discussion Papers 127, Institute for the Study of Labor (IZA).
  3. Dennis J. Snower, 1993. "Insider-Outsider-Beziehungen und Einkommensverteilung," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 19(4), pages 461-470.
  4. Marika Karanassou & Hector Sala & Dennis J. Snower, 2007. "The Macroeconomics of the Labor Market: Three Fundamental Views," Working Papers, Queen Mary, University of London, School of Economics and Finance 585, Queen Mary, University of London, School of Economics and Finance.

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