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Trade Unions, Efficiency Wages, and Shirking

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  • Bulkley, George
  • Myles, Gareth D

Abstract

Efficiency wage models typically study the determination of wages and effort levels in the context of a labour market where the supply side is competitive. In this paper, the authors examine the effects of unionization on wages and effort. In addition to the monitoring technology where a noisy signal of each workers performance is received, they propose and investigate a spot-check monitoring technology where the effort of a fraction of workers is measured exactly. They examine models where the union can bargain over wages alone, and over wages and effort. In all cases, the authors show that the popular wisdom that unions reduce effort is generally false. Copyright 1996 by Royal Economic Society.

Suggested Citation

  • Bulkley, George & Myles, Gareth D, 1996. "Trade Unions, Efficiency Wages, and Shirking," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 75-88, January.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:1:p:75-88
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    Cited by:

    1. Arzu Yavuz, 2011. "Productivity and Wage Differentials between Private and Public Sector in the Developing Countries (Gelismekte Olan Ülkelerde Özel ve Kamu Sektöründeki Verimlilik ve Ücret Farklilasmasi)," Working Papers 1103, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    2. Erkki Koskela & Ronnie Schöb, 2012. "Tax Progression under Collective Wage Bargaining and Individual Effort Determination," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 749-771, July.
    3. Bulkley, George & Myles, Gareth D., 1997. "Bargaining over effort," European Journal of Political Economy, Elsevier, vol. 13(2), pages 375-384, May.
    4. Erkki Koskela & Rune Stenbacka, 2000. "Compensation and Bargaining with Entrpreneurship as the Outside Option," CESifo Working Paper Series 314, CESifo Group Munich.
    5. Erkki Koskela & Rune Stenbacka, 2004. "Profit Sharing and Unemployment: An Approach with Bargaining and Efficiency-Wage Effects," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 477-477, September.
    6. Erkki Koskela & Jan König, 2009. "Can Profit Sharing Lower Flexible Outsourcing? A Note," CESifo Working Paper Series 2606, CESifo Group Munich.
    7. Koskela, Erkki & König, Jan, 2009. "Can Profit Sharing Lower Flexible Outsourcing? A Note," IZA Discussion Papers 4063, Institute for the Study of Labor (IZA).
    8. Altenburg, Lutz & Straub, Martin, 2001. "Taxes on labour and unemployment in a shirking model with union bargaining," Labour Economics, Elsevier, vol. 8(6), pages 721-744, December.
    9. repec:kap:iaecre:v:10:y:2004:i:2:p:113-122 is not listed on IDEAS
    10. Erkki Koskela & Rune Stenbacka, 2004. "Equilibrium unemployment under negotiated profit sharing," Labor and Demography 0404009, EconWPA.
    11. Henrik Jacobsen Kleven & Peter Birch Sørensen, "undated". "Labour Tax Reform, The Good Jobs and the Bad Jobs," EPRU Working Paper Series 99-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    12. Gose, Karina & Sadrieh, Abdolkarim, 2014. "Strike, coordination, and dismissal in uniform wage settings," European Economic Review, Elsevier, vol. 70(C), pages 145-158.
    13. Koskela, Erkki & Stenbacka, Rune, 2003. "Profit Sharing and Unemployment: An Approach with Bargaining and Efficiency Wage Economics," Discussion Papers 863, The Research Institute of the Finnish Economy.
    14. Koskela, Erkki & Stenbacka, Rune, 2003. "Equilibrium unemployment under negotiated profit sharing," Research Discussion Papers 19/2003, Bank of Finland.
    15. Novella Maugeri, 2010. "Macroeconomic Implications of Near Rational Behavior: an Application to the Italian Phillips Curve," Department of Economics University of Siena 587, Department of Economics, University of Siena.
    16. Fabio D'Orlando, 2004. "Endogenous employment rate in the efficiency wage shirking approach," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 10(2), pages 113-122, May.
    17. Goerke, Laszlo, 1997. "Taxes in an efficiency wage economy," Discussion Papers, Series II 335, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    18. Canegallo, Claudia, 1999. "Funzionamento del mercato del lavoro in presenza di informazione asimmetrica. Una rassegna della letteratura," POLIS Working Papers 8, Institute of Public Policy and Public Choice - POLIS.
    19. Koskela, Erkki & Stenbacka, Rune, 2003. "Equilibrium Unemployment Under Negotiated Profit Sharing," IZA Discussion Papers 840, Institute for the Study of Labor (IZA).
    20. Bo Sandemann Rasmussen, "undated". "Efficiency Wages and the Long-Run Incidence of Progressive Taxation," Economics Working Papers 2001-5, Department of Economics and Business Economics, Aarhus University.
    21. Erkki Koskela & Rune Stenbacka, 2000. "Capital Structure, Wage Bargaining and Employment," CESifo Working Paper Series 275, CESifo Group Munich.

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