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Imperfect Goods and Labor Markets, and the Union Wage Gap

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Author Info
Helge Sanner

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Abstract

Existing theoretical literature fails to explain the differences between the pay of workers that are covered by union agreements and others who are not. This study aims at closing this gap by a single general- equilibrium approach that integrates a dual labor market and a two- sector product market. Our results suggest that the so­ called 'union wage gap' is largely determined by the degree of centralization of the bargains, and, to a somewhat lesser extent, by the expenditure share of the unionized sector's goods.

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Paper provided by Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät in its series Volkswirtschaftliche Diskussionsbeiträge with number 55.

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Date of creation: 2003
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Publication status: Forthcoming in Journal of Population Economics
Handle: RePEc:pot:vwldis:55

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Related research
Keywords: Monopolistic competition Dual labor market Wage bargaining Trade unions

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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References listed on IDEAS
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. Joaquim Oliveira Martins & Stefano Scarpetta & Dirk Pilat, 1996. "Mark-Up Ratios in Manufacturing Industries: Estimates for 14 OECD Countries," OECD Economics Department Working Papers 162, OECD Economics Department. [Downloadable!]
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  4. Boeri, Tito & Nicoletti, Giuseppe & Scarpetta, Stefano, 2000. "Regulation And Labour Market Performance," CEPR Discussion Papers 2420, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Hirsch, Barry T. & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects Of Regulation And Deregulation In Goods And Labor Markets," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 879-907, August. [Downloadable!] (restricted)
    Other versions:
  7. Sébastien Jean & Giuseppe Nicoletti, 2002. "Product Market Regulation and Wage Premia in Europe and North America: An Empirical Investigation," OECD Economics Department Working Papers 318, OECD Economics Department. [Downloadable!]
  8. Bernt Bratsberg & James F. Ragan & Jr, 2002. "Changes in the union wage premium by industry," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(1), pages 65-83, October.
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  11. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Economics Department. [Downloadable!]
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  14. Robinson, Chris, 1989. "The Joint Determination of Union Status and Union Wage Effects: Some Tests of Alternative Models," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 639-67, June. [Downloadable!] (restricted)
  15. Harrison, Glenn & Rutherford, Thomas & Tarr, David & DEC, 1994. "Product standards, imperfect competition and completion of the market in the European Union," Policy Research Working Paper Series 1293, The World Bank. [Downloadable!]
  16. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  17. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March. [Downloadable!] (restricted)
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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. Norbert Eickhof & Kathrin Isele, 2005. "Do Economists Matter? Eine politökonomische Analyse des Einflusses wettbewerbspolitischer Leitbilder auf die europäische Fusionskontrolle," Volkswirtschaftliche Diskussionsbeiträge 74, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. [Downloadable!]
  2. Gert Kneis & Klaus Schöler, 2002. "Zur Begründung der linearen Nachfragefunktion in der Haushaltstheorie," Volkswirtschaftliche Diskussionsbeiträge 48, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. [Downloadable!]
  3. Do Truong Giang, 2004. "Tariffs and export subsidies in a spatial economic model," Volkswirtschaftliche Diskussionsbeiträge 65, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. [Downloadable!]
  4. Klaus Schöler, 2007. "Gibt es eine optimale Stadtgröße?," Volkswirtschaftliche Diskussionsbeiträge 89, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. [Downloadable!]
  5. Verena L. Holzer, 2004. "Does the German Renewable Energies Act fulfil Sustainable Development Objectives?," Volkswirtschaftliche Diskussionsbeiträge 73, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät. [Downloadable!]
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