Unions, monopolistic competition and unemployment
AbstractThis paper develops a general equilibrium dual labour market model which incorporates union bargaining with monopolistically competitive firms. It is shown that not only the degree of union bargaining power but also the market power firms possess on the product market have a positive influence on unemployment. The reason for this is that less intense product market competition increases the negotiated wage rates as well as the price mark-up firms charge over their marginal costs, both of which reduce labour demand. It is also shown that higher competition intensity will force firms to merge to larger units. --
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Bibliographic InfoPaper provided by University of Tübingen, School of Business and Economics in its series Tübinger Diskussionsbeiträge with number 180.
Date of creation: 2000
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Find related papers by JEL classification:
- J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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