Unionisation Structures and Innovation Incentives
AbstractThis paper examines how different unionisation structures affect firms’ innovation incentives and industry employment. We distinguish three modes of unionisation with increasing degree of centralisation: (1) “Decentralisation” where wages are determined independently at the firm-level, (2) “coordination” where one industry union sets individual wages for all firms, and (3) “centralisation” where an industry union sets a uniform wage rate for all firms. While firms’ investment incentives are largest under “centralisation,” investment incentives are non-monotone in the degree of centralisation: “Decentralisation” carries higher investment incentives than “coordination.” Labour market policy can spur innovation by decentralising unionisation structures or through non-discrimination rules.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 398.
Length: 28 p.
Date of creation: 2004
Date of revision:
Publication status: Published in: The Economic Journal 114 (2004), 494, C149-C165
Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
- K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-23 (All new papers)
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