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Bargaining, Compensating Wage Differentials, and Dualism of the Labor Market: Theory and Evidence for France

  • Daniel, Christophe
  • Sofer, Catherine

The theory of compensating differentials predicts a negative relationship between wages and good working conditions, while the theory of segmentation predicts a positive one. Combining the hedonic wage model and the wages-employment collective bargaining model, the authors show the relevance of a further factor: a union power effect. Then they test the validity of this effect with French cross-section data. Empirical results confirm the predictions of the model, that is, the coexistence of a negative relationship between wages and good working conditions for the whole sample (market effect) and a positive relationship in highly unionized sectors (union power effect). Copyright 1998 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/209898
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 16 (1998)
Issue (Month): 3 (July)
Pages: 546-75

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Handle: RePEc:ucp:jlabec:v:16:y:1998:i:3:p:546-75
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Weiss, Yoram, 1976. "The Wealth Effect in Occupational Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(2), pages 292-307, June.
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  4. repec:sae:ilrrev:v:32:y:1979:i:3:p:339-362 is not listed on IDEAS
  5. Duncan, Greg J & Stafford, Frank P, 1980. "Do Union Members Receive Compensating Wage Differentials?," American Economic Review, American Economic Association, vol. 70(3), pages 355-71, June.
  6. Lucas, Robert E B, 1977. "Hedonic Wage Equations and Psychic Wages in the Returns to Schooling," American Economic Review, American Economic Association, vol. 67(4), pages 549-58, September.
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  12. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
  13. Robert S. Smith, 1979. "Compensating Wage Differentials and Public Policy: A Review," ILR Review, Cornell University, ILR School, vol. 32(3), pages 339-352, April.
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  15. Pierre Cahuc & Hélène Zajdela, 1991. "Comment expliquer le dualisme du marché du travail à partir de comportements rationnels ?," Revue Économique, Programme National Persée, vol. 42(3), pages 469-492.
  16. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S3-S39, June.
  17. Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 113-134.
  18. McNabb, Robert, 1989. "Compensating Wage Differentials: Some Evidence for Britain," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 327-38, April.
  19. Hersch, Joni, 1989. "Another look at compensating differentials," Journal of Behavioral Economics, Elsevier, vol. 18(1), pages 41-50.
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