Seniority and Distribution in a Two-Worker Trade Union
AbstractUnlike existing models that rely heavily on assumption regarding unions' distributional preferences, the authors present a simple model in which union seniority-layoff rules and rising seniority-wage profiles result from optimal price discrimination against the firm. Surprisingly, even when cash transfers among union members are ruled out, unions' optimal seniority-wage profiles are likely to be completely unaffected by their distributional preferences because of a kink in the utility-possibility frontier. This suggests that the simple technology of price discrimination may play a key role, hitherto unappreciated, in explaining union policies that affect the relative well-being of different union members. Copyright 1989, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoPaper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 615.
Date of creation: Jul 1988
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unions; seniority; wages; layoffs;
Other versions of this item:
- Kuhn, Peter & Robert, Jacques, 1989. "Seniority and Distribution in a Two-Worker Trade Union," The Quarterly Journal of Economics, MIT Press, vol. 104(3), pages 485-505, August.
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
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