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Is Unemployment Lower If Unions Bargain Over Employment?

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  • LAYARD, R.
  • NICKELL, S.

Abstract

Would there be more employment if unions bargained over employment, and not only over wages? Most economists seem to answer Yes:1 Proposition 1 If unions bargain over employment and wages, employment will be higher than if they bargain only over wages. Most economists also believe the following: Proposition 2 If unions bargain over employment and wages and are utilitarian and risk-averse, then ‘equilibrium employment is higher than in the equivalent competitive labour market’ (Oswald. 1985). So, in the eyes of many, bargaining over employment is a good thing.
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Suggested Citation

  • Layard, R. & Nickell, S., 1988. "Is Unemployment Lower If Unions Bargain Over Employment?," Papers 308, London School of Economics - Centre for Labour Economics.
    • Handle: RePEc:fth:lseple:308
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