A Search Model in a Segmented Labour Market: the Odd Role of Unions
AbstractAssuming random matching productivity, we present a search equilibrium model where each match ends in a vacancy, in a temporary job or in a permanent job. Centralized bargaining sets the wage rate of permanent workers whereas rms decide unilaterally the wage rate of temporary workers. In this segmented labour market: a) the wage setting function can be downward sloping; b) higher union bargaining power leads to higher wage and higher unemployment; c) average worker productivity shows a maximum with respect to union bargaining power.
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Bibliographic InfoPaper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 349.
Date of creation: Oct 2010
Date of revision:
Productivity; Search Model; Temporary contract; Unemployment; Unions;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-27 (All new papers)
- NEP-BEC-2010-11-27 (Business Economics)
- NEP-DGE-2010-11-27 (Dynamic General Equilibrium)
- NEP-LAB-2010-11-27 (Labour Economics)
- NEP-MIC-2010-11-27 (Microeconomics)
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