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Centralized Bargaining, Multi-Tasking, and Work Incentives

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  • Lindbeck, Assar
  • Snower, Dennis J.

Abstract

The paper examines the implications of an important aspect of the ongoing reorganization of work – the move from occupational specialization towards multi-tasking – for centralized wage bargaining. The analysis shows how, on account of this reorganization, centralized bargaining becomes increasingly inefficient 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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1563.

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Date of creation: Jan 1997
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Handle: RePEc:cpr:ceprdp:1563

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Keywords: Centralized wage bargaining; Employment; Information Flows; Organization of Firms; Restructuring; Technological Change; Unemployment; Wage Formation;

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References

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Citations

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Cited by:
  1. 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.
  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. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA).
  5. Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series 871, CESifo Group Munich.

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