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Regulation with wage bargaining

Author

Listed:
  • Dag Morten Dalen
  • Nils-Henrik M von der Fehr
  • Espen R Moen

Abstract

In many regulated industries labour unions are strong and there is clear empirical evidence of labour rent-sharing. In this paper, we study optimal regulation in a model in which wages are determined endogenously by wage bargaining at the firm level. A seemingly robust conclusion, at least when worker bargaining power is considerable, is that incentives for cost efficiency should be stronger than in the standard case in which wages do not depend on the regulatory regime. Copyright 2003 Royal Economic Society.

Suggested Citation

  • Dag Morten Dalen & Nils-Henrik M von der Fehr & Espen R Moen, 2003. "Regulation with wage bargaining," Economic Journal, Royal Economic Society, vol. 113(487), pages 525-538, April.
    • Handle: RePEc:ecj:econjl:v:113:y:2003:i:487:p:525-538
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    Cited by:

    1. Blondiau, Thomas & Glazer, Amihai & Proost, Stef, 2018. "Air traffic control regulation with union bargaining in Europe 11This paper presents results of the ACCHANGE consortium – SESAR project E02.31 – whose support we gratefully acknowledge. We thank the guest editor and two anonymous referees for their u," Economics of Transportation, Elsevier, vol. 13(C), pages 48-60.
    2. Blondiau, Thomas & Delhaye, Eef & Proost, Stef & Adler, Nicole, 2016. "ACCHANGE: Building economic models to analyse the performance of air navigation service providers," Journal of Air Transport Management, Elsevier, vol. 56(PA), pages 19-27.

    More about this item

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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