IDEAS home Printed from https://ideas.repec.org/a/eei/journl/v56y2013i2p1-24.html
   My bibliography  Save this article

Striking Features of the Labor Market: Theory

Author

Listed:
  • William H. Greene
  • Ana P. Martins

Abstract

The present paper develops a simple asymmetrical informational model that allows us to understand the individual´s willingness to participate in a strike. We develop and compare two signaling models of strikes: in one, firms are able to monitor and enforce hours and offer different workweeks to the two types of workers a previous part-time/full-time wage schedules separating equilibrium was presented. In the other, only one work-week schedule can be offered.

Suggested Citation

  • William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Theory," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 1-24.
  • Handle: RePEc:eei:journl:v:56:y:2013:i:2:p:1-24
    as

    Download full text from publisher

    File URL: https://ideas.repec.org/a/eei/journl/v56y2013i2p1-24.html
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ana Paula Martins, 2012. "Portfolio Selection – A Technical Note," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(3), pages 78-99.
    2. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Empirical Evidence," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 25-53.
    3. Stiglitz, Joseph E, 1975. "The Theory of "Screening," Education, and the Distribution of Income," American Economic Review, American Economic Association, vol. 65(3), pages 283-300, June.
    4. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    5. Ana Paula Martins, 2012. "On Depth and Retrospect: “I Forget, and Forgive – but I Discount”," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(3), pages 1-45.
    6. Ana Paula Martins, 2010. "Splitting Games: Nash Equilibrium and the Optimisation Problem," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(1), pages 1-28.
    7. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
    8. Booth, Alison & Cressy, Robert, 1990. "Strikes with Asymmetric Information: Theory and Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(3), pages 269-291, August.
    9. Asher Wolinsky, 2000. "A Theory of the Firm with Non-Binding Employment Contracts," Econometrica, Econometric Society, vol. 68(4), pages 875-910, July.
    10. Fernandez, Raquel & Glazer, Jacob, 1991. "Striking for a Bargain between Two Completely Informed Agents," American Economic Review, American Economic Association, vol. 81(1), pages 240-252, March.
    11. Kennan, John & Wilson, Robert, 1990. "Can Strategic Bargaining Models Explain Collective Bargaining Data?," American Economic Review, American Economic Association, vol. 80(2), pages 405-409, May.
    12. Barry McCormick, 1990. "A Theory of Signalling During Job Search, Employment Efficiency, and "Stigmatised" Jobs," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 299-313.
    13. Ana Paula Martins, 2012. "Unemployment Insurance and Union Behavior: Comparison of Some Paradigms and Endogenous Membership," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(1), pages 19-38.
    14. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, March.
    15. Ana Paula Martins, 2010. "Frontier Techniques: Contrasting the Performance of (Single-)Truncated Order Regression Methods and Replicated Moments," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(2), pages 75-93.
    16. Francis K. Cheung & Carl Davidson, 1991. "Bargaining Structure and Strike Activity," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 345-371, May.
    17. Obeua S. Persons, 1995. "The Effects of Automobile Strikes on the Stock Value of Steel Suppliers," ILR Review, Cornell University, ILR School, vol. 49(1), pages 78-87, October.
    18. Card, David, 1990. "Strikes and Bargaining: A Survey of the Recent Empirical Literature," American Economic Review, American Economic Association, vol. 80(2), pages 410-415, May.
    19. Varoufakis, Yanis, 1996. "Bargaining and strikes: Towards an evolutionary framework," Labour Economics, Elsevier, vol. 3(4), pages 385-398, December.
    20. Cogan, John F, 1981. "Fixed Costs and Labor Supply," Econometrica, Econometric Society, vol. 49(4), pages 945-963, June.
    21. John Godard, 1992. "Strikes as Collective Voice: A Behavioral Analysis of Strike Activity," ILR Review, Cornell University, ILR School, vol. 46(1), pages 161-175, October.
    22. Alan Harrison & Mark B. Stewart, 1993. "Strike Duration and Strike Size," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 830-849, November.
    23. Ana Paula Martins, 2011. "Compliance with the Institutional Wage in Dualistic Models," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 54(2), pages 93-126.
    24. Wilson, Robert, 1988. " Credentials and Wage Discrimination," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(4), pages 549-562.
    25. Jimenez-Martin, Sergi, 1999. "Controlling for Endogeneity of Strike Variables in the Estimation of Wage Settlement Equations," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 583-606, July.
    26. Vroman, Susan B, 1989. "A Longitudinal Analysis of Strike Activity in U.S. Manufacturing: 1957-1984," American Economic Review, American Economic Association, vol. 79(4), pages 816-826, September.
    27. David Card, 1990. "Strikes and Wages: A Test of an Asymmetric Information Model," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 625-659.
    28. Card, David, 1988. "Longitudinal Analysis of Strike Activity," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 147-176, April.
    29. Ashenfelter, Orley & Johnson, George E, 1969. "Bargaining Theory, Trade Unions, and Industrial Strike Activity," American Economic Review, American Economic Association, vol. 59(1), pages 35-49, March.
    30. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    31. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
    32. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 87-130, Supplemen.
    33. Ana Paula Martins, 2012. "Segmented Life-cycle Labor Markets," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(1), pages 39-74.
    34. Booth, Alison & Cressy, Robert, 1990. "Erratum [Strikes with Asymmetric Information: Theory and Evidence]," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(4), pages 492-492, Special I.
    35. Card, David & Olson, Craig A, 1995. "Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 32-61, January.
    36. Riley, John G, 1979. "Testing the Educational Screening Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 227-252, October.
    37. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    38. Oi, Walter Y, 1976. "Residential Location and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 221-238, August.
    39. Schnell, John F & Gramm, Cynthia L, 1987. "Learning by Striking: Estimates of the Teetotaler Effect," Journal of Labor Economics, University of Chicago Press, vol. 5(2), pages 221-241, April.
    40. Albert Ma, Ching-to & Weiss, Andrew M., 1993. "A signaling theory of unemployment," European Economic Review, Elsevier, vol. 37(1), pages 135-157, January.
    41. Hayes, Beth, 1984. "Unions and Strikes with Asymmetric Information," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 57-83, January.
    42. Clark, Simon, 1997. "Inventories and Strikes," Economica, London School of Economics and Political Science, vol. 64(256), pages 645-667, November.
    43. Harrison, Alan & Stewart, Mark, 1994. "Is Strike Behavior Cyclical?," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 524-553, October.
    44. Tracy, Joseph S, 1987. "An Empirical Test of an Asymmetric Information Model of Strikes," Journal of Labor Economics, University of Chicago Press, vol. 5(2), pages 149-173, April.
    45. Morley Gunderson & John Kervin & Frank Reid, 1989. "The Effect of Labour Relations Legislation on Strike Incidence," Canadian Journal of Economics, Canadian Economics Association, vol. 22(4), pages 779-794, November.
    46. Weiss, Andrew, 1983. "A Sorting-cum-Learning Model of Education," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 420-442, June.
    47. Clark, Simon, 1996. "Strike Behaviour When Market Share Matters," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 618-639, October.
    48. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
    49. Leach, John, 1997. "Inventories and Wage Bargaining," Journal of Economic Theory, Elsevier, vol. 75(2), pages 433-463, August.
    50. Wolpin, Kenneth I, 1977. "Education and Screening," American Economic Review, American Economic Association, vol. 67(5), pages 949-958, December.
    51. Harrison, Alan & Stewart, Mark, 1989. "Cyclical Fluctuations in Strike Durations," American Economic Review, American Economic Association, vol. 79(4), pages 827-841, September.
    52. Reder, Melvin W & Neumann, George R, 1980. "Conflict and Contract: The Case of Strikes," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 867-886, October.
    53. Carter, Colin, et al, 1987. "Agricultural Labor Strikes and Farmers' Income," Economic Inquiry, Western Economic Association International, vol. 25(1), pages 121-133, January.
    54. Jonathan K. Kramer & Geraldo M. Vasconcellos, 1996. "The Economic Effect of Strikes on the Shareholders of Nonstruck Competitors," ILR Review, Cornell University, ILR School, vol. 49(2), pages 213-222, January.
    55. Macho-Stadler, Ines & Perez-Castrillo, J. David, 2001. "An Introduction to the Economics of Information: Incentives and Contracts," OUP Catalogue, Oxford University Press, edition 2, number 9780199243259.
    56. Tracy, Joseph S, 1986. "An Investigation into the Determinants of U.S. Strike Activity," American Economic Review, American Economic Association, vol. 76(3), pages 423-436, June.
    57. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
    58. Gunderson, Morley & Kervin, John & Reid, Frank, 1986. "Logit Estimates of Strike Incidence from Canadian Contract Data," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 257-276, April.
    59. Goerke, Laszlo, 1998. "Taxes, Strikes and Wages," Bulletin of Economic Research, Wiley Blackwell, vol. 50(2), pages 117-132, April.
    60. Ana Paula Martins, 2006. "On Simple Conditions for Mixed Equilibria in Dualistic Models. Part II: Degree of Coverage," EERI Research Paper Series EERI_RP_2006_04, Economics and Econometrics Research Institute (EERI), Brussels.
    61. Gu, Wulong & Kuhn, Peter, 1998. "A Theory of Holdouts in Wage Bargaining," American Economic Review, American Economic Association, vol. 88(3), pages 428-449, June.
    62. Farber, Henry S, 1978. "Bargaining Theory, Wage Outcomes, and the Occurrence of Strikes: An Econometric Analysis," American Economic Review, American Economic Association, vol. 68(3), pages 262-271, June.
    63. Altonji, Joseph G & Paxson, Christina H, 1988. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Trade-Offs," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 254-276, April.
    64. Cramton, Peter C & Tracy, Joseph S, 1994. "The Determinants of U.S. Labor Disputes," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 180-209, April.
    65. Ana Paula Martins, 2002. "Reconciling the Nash and Kalai-Smorodinsky Cooperative Solutions: Generalized Maximands of CES Form," EERI Research Paper Series EERI_RP_2002_05, Economics and Econometrics Research Institute (EERI), Brussels.
    66. Haller, Hans & Holden, Steinar, 1990. "A letter to the editor on wage bargaining," Journal of Economic Theory, Elsevier, vol. 52(1), pages 232-236, October.
    67. Bruce C. Greenwald, 1986. "Adverse Selection in the Labour Market," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 325-347.
    68. Ana Paula Martins, 2006. "On Simple Conditions for Mixed Equilibria in Dualistic Models. Part I: Degree of Mobility," EERI Research Paper Series EERI_RP_2006_03, Economics and Econometrics Research Institute (EERI), Brussels.
    69. McConnell, Sheena, 1989. "Strikes, Wages, and Private Information," American Economic Review, American Economic Association, vol. 79(4), pages 801-815, September.
    70. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
    71. White, Halbert, 1982. "Maximum Likelihood Estimation of Misspecified Models," Econometrica, Econometric Society, vol. 50(1), pages 1-25, January.
    72. Alan Harrison, 1996. "Contracts and Strikes in Canada, 1952-1988," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 76-83, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bruna BRUNO & Damiano FIORILLO, 2016. "Voluntary Work And Wages," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 87(2), pages 175-202, December.
    2. M. Rosaria Alfano & A. Laura Baraldi, 2014. "Electoral Systems and Economic Growth: What is the Importance of the Proportionality Degree?," EERI Research Paper Series EERI RP 2014/06, Economics and Econometrics Research Institute (EERI), Brussels.

    More about this item

    Keywords

    Strikes; asymmetric information; signaling; labor contracts; part-time work; mean or grouped data and limited dependent variables; binary choice models with mean or grouped data; sample selection with mean data.;

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eei:journl:v:56:y:2013:i:2:p:1-24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julia van Hove). General contact details of provider: http://edirc.repec.org/data/eeriibe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.