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Efficient Union Contracts in the Presence of Homogeneous Labor and Differentiated Unions

Author

Listed:
  • Ana Paula Martins

    (Universidade Catolica Portuguesa)

  • Rui Coimbra

    (Departamento de Economia, Universidade Catoica Portuguesa)

Abstract

This paper discusses the features of the labor market outcome in the presence of homogeneous labor and multiple unions. It is argued that contract curve agreements, or at least efficient bargaining among unions, may be improved upon by a solution with differential or non-uniform wage payments for workers affiliated to different unions. The equilibrium solution in terms of employment and/or wage bill shares implied for each union with uniform and multiple wage is investigated and confronted for the cases of: a. efficient bargaining among the unions, b. fully efficient bargaining, considering Stone-Geary union utility functions and labor demand is linear.

Suggested Citation

  • Ana Paula Martins & Rui Coimbra, 2004. "Efficient Union Contracts in the Presence of Homogeneous Labor and Differentiated Unions," Annals of Economics and Finance, Society for AEF, vol. 5(1), pages 27-46, May.
    • Handle: RePEc:cuf:journl:y:2004:v:5:i:1:p:27-46
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    References listed on IDEAS

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    More about this item

    Keywords

    Unions; Wage determination models; Union bargaining; Union cooperation; Contract curve agreements;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other

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