Bargaining, Capital Formation and Unemployment: A Putty-Clay Approach
AbstractSwedish unemployment was very low up to the early 1990s when it rose rapidly. Theoretically, decentralisation of wage bargaining in the 1980s might have allowed low-productivity firms to survive or increased wage mark-ups, making employment more sensitive to shocks. In Swedish plant-level data for manufacturing 1968-1992 relatively less employment is in low-productivity plants after decentralisation than before, but a positive correlation emerges between industry wage costs and productivity. A putty-clay model with bargaining explains a puzzling desynchronisation between real wage and productivity growth and indicates the decentralisation might have increased the wage mark-up.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1997:18.
Length: 29 pages
Date of creation: 29 Aug 1997
Date of revision:
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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Unemployment; bargaining institutions; putty-clay production;
Other versions of this item:
- Forslund, A, Lindh, T., 1997. "Bargaining, Capital Formation and Unemployment: A Putty-Clay Approach," Papers 1997-18, Uppsala - Working Paper Series.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- Gerard J. van den Berg, 2003.
"Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1337-1357, November.
- Berg, Gerard J. van den, 1999. "Multiple equilibria and minimum wages in labor markets with informational frictions and heterogeneous production technologies," Serie Research Memoranda 0044, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- van den Berg, Gerard J, 2003. "Multiple Equilibria and Minimum Wages in Labour Markets with Informational Frictions and Heterogenous Production Technologies," CEPR Discussion Papers 3977, C.E.P.R. Discussion Papers.
- Gerard J. van den Berg, 1999. "Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies," Tinbergen Institute Discussion Papers 99-085/3, Tinbergen Institute.
- van den Berg, Gerard J., 2003. "Multiple Equilibria and Minimum Wages in Labor Markets with Informational Frictions and Heterogeneous Production Technologies," IZA Discussion Papers 806, Institute for the Study of Labor (IZA).
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