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Centralized Bargaining, Multi-Tasking and Work Incentives

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Author Info
Lindbeck, Assar () (Institute for International Economic Studies, Stockholm University)
Snower, Dennis J. () (Department of Economics, Birkbeck College)

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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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Publisher Info
Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 620.

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Length: 11 pages
Date of creation: 30 Oct 1997
Date of revision:
Handle: RePEc:hhs:iiessp:0620

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
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Web page: http://www.iies.su.se/
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Related research
Keywords: Centralized wage bargaining; restructuring; organization of firms; technological change; information flows; employment; wage formation; unemployment;

Other versions of this item:

Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

References listed on IDEAS
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    Other versions:
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  16. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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. [Downloadable!] (restricted)
  2. Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Lindbeck, Assar & Snower, Dennis J., 1999. "Multi-Task Learning and the Reorganization of Work. From Tayloristic to Holistic Organization," IZA Discussion Papers 39, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Snower, Dennis J., 1999. "Inequality of Earnings," CEPR Discussion Papers 2321, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Siebert, Horst, 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. [Downloadable!] (restricted)
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