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Testing between alternative wage-employment bargaining models using Belgian aggregate data

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  • Vannetelbosch, Vincent J.

Abstract

In this paper, I discriminate among alternative models of bargaining for wages and employment (right-to-manage, efficient bargaining and general bargaining models) using Belgian aggregate data. I estimate the ECM representation of a dynamic employment equation for each model using Engle-Granger’s two-step estimation procedure. I use Phillips-Hansen’s FME to obtain long-run parameters’ estimators which are optimal and asymptotically normally distributed. On the basis of non-nested tests, both the right-to-manage and the hypothesis that wage-employment negotiations are efficient are ejected in favour of the general bargaining model where outcomes are inefficient.
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  • Vannetelbosch, Vincent J., 1996. "Testing between alternative wage-employment bargaining models using Belgian aggregate data," Labour Economics, Elsevier, vol. 3(1), pages 43-64, August.
    • Handle: RePEc:eee:labeco:v:3:y:1996:i:1:p:43-64
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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
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    8. Stephen Nickell & Sushil Wadhwani, 1991. "Employment Determination in British Industry: Investigations Using Micro-Data," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 955-969.
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    10. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-139, March.
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    12. Roth, Alvin E, 1985. "A Note on Risk Aversion in a Perfect Equilibrium Model of Bargaining," Econometrica, Econometric Society, vol. 53(1), pages 207-211, January.
    13. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    14. Urbain, Jean-Pierre, 1992. "On Weak Exogeneity in Error Correction Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 187-207, May.
    15. Bogaert, H. & de Biolley, T. & Verlinden, J., 1991. "L'ajustement des salaires face aux chocs pétroliers et les réponses de la politique économique," LIDAM Discussion Papers IRES 1991008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    16. Alogoskoufis, George & Manning, Alan, 1991. "Tests of alternative wage employment bargaining models with an application to the UK aggregate labour market," European Economic Review, Elsevier, vol. 35(1), pages 23-37, January.
    17. Engle, R. F. & Granger, C. W. J. (ed.), 1991. "Long-Run Economic Relationships: Readings in Cointegration," OUP Catalogue, Oxford University Press, number 9780198283393, Decembrie.
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    Cited by:

    1. Ana Mauleon & Jose J. Sempere-Monerris & Vincent Vannetelbosch, 2008. "Networks of knowledge among unionized firms," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 971-997, August.
    2. Ana Mauleon & Vincent Vannetelbosch, 1999. "Profit sharing and strike activity in Cournot oligopoly," Journal of Economics, Springer, vol. 69(1), pages 19-40, February.
    3. Vannetelbosch, Vincent J., 1997. "Wage bargaining with incomplete information in an unionized Cournot oligopoly," European Journal of Political Economy, Elsevier, vol. 13(2), pages 353-374, May.
    4. Philip Du Caju & François Rycx & Ilan Tojerow, 2011. "Inter‐Industry Wage Differentials: How Much Does Rent Sharing Matter?," Manchester School, University of Manchester, vol. 79(4), pages 691-717, July.
    5. François Rycx & Ilan Tojerow, 2004. "Rent sharing and the gender wage gap in Belgium," International Journal of Manpower, Emerald Group Publishing Limited, vol. 25(3/4), pages 279-299, April.
    6. Brännlund, Runar & Nordström, Jonas & Svedin, Dick, 2004. "Foreign ownership and effects on employment and wages: The case of Sweden," Umeå Economic Studies 638, Umeå University, Department of Economics, revised 01 Nov 2004.
    7. Rupayan Pal & Bibhas Saha, 2016. "Entry Threats and Inefficiency in ‘Efficient Bargaining’," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(3), pages 258-277, July.
    8. Ana MAULEON & Vincent J. VANNETELBOSCH, 2001. "Product Market Integration, Wage Bargaining and Strike Activity," LIDAM Discussion Papers IRES 2001022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    9. Navon, Guy & Tojerow, Ilan, 2006. "The Effects of Rent-Sharing on the Gender Wage Gap in the Israeli Manufacturing Sector," IZA Discussion Papers 2361, Institute of Labor Economics (IZA).
    10. Mauleon, Ana & Vannetelbosch, Vincent J., 2003. "Market competition and strike activity," International Journal of Industrial Organization, Elsevier, vol. 21(5), pages 737-758, May.
    11. Robert Plasman & François Rycx & Ilan Tojerow, 2006. "Industry wage differentials, unobserved ability, and rent-sharing : Evidence from matched worker-firm data, 1995-2002," Working Paper Research 90, National Bank of Belgium.
    12. Du Caju, Philip & Rycx, François & Tojerow, Ilan, 2008. "Rent-Sharing and the Cyclicality of Wage Differentials," IZA Discussion Papers 3844, Institute of Labor Economics (IZA).
    13. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    14. Michael Rusinek, 2009. "Wages and the bargaining regimes in corporatists countries: a series of empirical essays," ULB Institutional Repository 2013/210322, ULB -- Universite Libre de Bruxelles.
    15. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    16. MAULEON, Ana & VANNETLEBOSCH, Vincent J., 2001. "Efficiency Wages, Unio-Firm Bargaining, and Strikes," LIDAM Discussion Papers IRES 2001010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    17. Robert Plasman & François Rycx & Ilan Tojerow, 2006. "Industry wage differentials, unobserved ability, and rent-sharing: evidence from matched employer-employee, 1992-2005," DULBEA Working Papers 06-14.RS, ULB -- Universite Libre de Bruxelles.
    18. Milas, Costas, 1998. "Long-run structural estimation of labour market equations with an application to Greece1," Economic Modelling, Elsevier, vol. 16(1), pages 149-161, January.
    19. Runar Brännlund & Jonas Nordström & Jesper Stage & Dick Svedin, 2016. "Foreign ownership and its effects on employment and wages: the case of Sweden," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-17, December.
    20. repec:pri:indrel:dsp01cc08hf62w is not listed on IDEAS
    21. Guy Navon & Ilan Tojerow, 2013. "Does Rent-sharing Profit Female and Male Workers? Evidence from Israeli Matched Employer–Employee Data," LABOUR, CEIS, vol. 27(3), pages 331-349, September.

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    More about this item

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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