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Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor

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  • Mumford, Karen
  • Dowrick, Steve

Abstract

This paper estimates the role of insider power in wage determination in a unionized industry, examining the direction and magnitude of biases that may arise through failure to control for variation in both hours of work and the composition of the labor force and through failure to control for the endogeneity of measured profits. Furthermore, by examining the extent to which rent-sharing is related to exogenous demand shocks rather than to potentially endogenous productivity, the authors provide a test of the bargaining and pure efficiency wage models, finding that the majority of the insider weighting can be explained by the bargaining model. Copyright 1994 by MIT Press.

Suggested Citation

  • Mumford, Karen & Dowrick, Steve, 1994. "Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 329-336, May.
  • Handle: RePEc:tpr:restat:v:76:y:1994:i:2:p:329-36
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    Cited by:

    1. Matsushima, Noriaki & Mizuno, Tomomichi, 2013. "Vertical separation as a defense against strong suppliers," European Journal of Operational Research, Elsevier, vol. 228(1), pages 208-216.
    2. Kitamura, Hiroshi & Matsushima, Noriaki & Sato, Misato, 2018. "Exclusive contracts with complementary inputs," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 145-167.
    3. Rod Tyers, 2015. "Service Oligopolies and Australia's Economy-Wide Performance," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 48(4), pages 333-356, December.
    4. Elizabeth Webster & Yi-Ping Tseng, 2002. "The Determinants of Relative Wage Change in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 70-84.
    5. Filipe Almeida-Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, June.
    6. Natália Monteiro & Miguel Portela & Odd Straume, 2011. "Firm Ownership and Rent Sharing," Journal of Labor Research, Springer, vol. 32(3), pages 210-236, September.
    7. Noriaki Matsushima & Fumitoshi Mizutani, 2014. "How Does Market Size Affect Vertical Structure When Considering Vertical Coordination? Application to the Railway Industry," Pacific Economic Review, Wiley Blackwell, vol. 19(5), pages 657-676, December.
    8. Margarita Katsimi & Sarantis Kalyvitis & Thomas Moutos, 2009. ""Unwarranted" Wage Changes and the Return on Capital," CESifo Working Paper Series 2804, CESifo Group Munich.

    More about this item

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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