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Centralised Bargaining, Multitasking and Work Incentives

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  • Assar Lindbeck
  • Dennis Snower

Abstract

The paper examines the implications of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking - for centralized wage bargaining. The analysis shows how, on account of this reorganization, centralized bargaining becomes increasingly nefficient and detrimental to firms’ profit opportunities, since it prevents firms from offering their employees adequate incentives to perform the appropriate mix of tasks. The paper also shows how centralized bargaining inhibits firms from using wages to induce workers to learn how to use their experience from one set of tasks to enhance their performance at other tasks. In this way, the paper helps explain the increasing resistance to centralized bargaining in various advanced market economies.

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Bibliographic Info

Paper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Archive Discussion Papers with number 9624.

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Date of creation: 1996
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Handle: RePEc:bbk:bbkewp:9624

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  1. Harry C. Katz, 1993. "The decentralization of collective bargaining: A literature review and comparative analysis," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
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  6. Mathias Dewatripont & Patrick Bolton, 2004. "The firm as a communication network," ULB Institutional Repository 2013/9599, ULB -- Universite Libre de Bruxelles.
  7. Lindbeck, Assar & Snower, Dennis J, 1996. "Reorganization of Firms and Labor-Market Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 315-21, May.
  8. Lindbeck, Assar & Snower, Dennis J., 1997. "Restructuring Production and Work," Seminar Papers 602, Stockholm University, Institute for International Economic Studies.
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Cited by:
  1. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA).
  2. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
  3. Snower, Dennis J., 1999. "Inequality of Earnings," CEPR Discussion Papers 2321, C.E.P.R. Discussion Papers.
  4. Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series 871, CESifo Group Munich.
  5. Ansgar Belke & Bernhard Herz & Lukas Vogel, 2007. "Reforms, Exchange Rates and Monetary Commitment: A Panel Analysis for OECD Countries," Open Economies Review, Springer, vol. 18(3), pages 369-388, July.
  6. Floro Ernesto Caroleo, 2000. "Le Politiche per l'Occupazione in Europa: una Tassonomia Istituzionale," CELPE Discussion Papers 52, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.

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