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Wage Bargaining and Unemployment Persistence

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  • Olivier Jean Blanchard

Abstract

This paper looks at models of unemployment which make two central assumptions. The first is that wages are bargained between firms and employed workers, and that unemployment affects the outcome only to the extent that it affects the labor market prospects of either employed workers or of firms. The second is that the duration of unemployment affects either the search behavior or the skills of the unemployed, and/or the perceptions of firms of such skills. It argues that such models may explain riot only the evolution of European unemployment over the last two decades -an evolution which triggered their development, but many of the cyclical features of labor markets in general.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3664.

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Date of creation: Mar 1991
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Publication status: published as Journal of Money, Credit and Banking, 23-3-1, 1991, pp. 277-292.
Handle: RePEc:nbr:nberwo:3664

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  1. Blanchard, Olivier Jean & Diamond, Peter A, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 417-34, July.
  2. Olivier Jean Blanchard & Peter A. Diamond, 1989. "The Aggregate Matching Function," NBER Working Papers 3175, National Bureau of Economic Research, Inc.
  3. Summers, Lawrence H. & Dickens, William T. & Katz, Lawrence F. & Lang, Kevin, 1989. "Employee Crime and the Monitoring Puzzle," Scholarly Articles 3645199, Harvard University Department of Economics.
  4. Christofides, Louis N & Oswald, Andrew J, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 985-1002, August.
  5. Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 217-27, April.
  6. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
  7. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
  8. repec:fth:harver:1515 is not listed on IDEAS
  9. Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June.
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