Trade Union Priorities and Wage Rigidity
AbstractThe starting point of the paper is that trade unions engage in substitution once certain targets have been met. This implies that a priority-based or hierarchical model might be a better approximation to union behaviour. This model requires a two-part union utility function which changes when a satisfactory (or target) level of the priority variable (e.g. the wage rate) is met. After demonstrating the workings of such a model in a monopoly union framework, it is shown that when the wage is below the target level, there is real wage rigidity. Employment increases only when the target wage has been achieved
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 35791.
Date of creation: May 1994
Date of revision:
Publication status: Published in Labour 3.8(1994): pp. 567-580
Trade Unions; Wages;
Find related papers by JEL classification:
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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