The Political Economy of Collective Bargaining
We construct a political equilibrium in which employers and labour unions bargain over labour contracts, wage-earners and profit-earners lobby the government for taxation and labour market regulation, and labour market legislation must be accepted by the majority of voters. We show that the voters rule out profit sharing, because otherwise the government would capture all the gain. Furthermore, if it is much easier to tax wages than profits, then the government protects union power by regulation in the labour market. In such a case, the political equilibrium is characterized by strong union power and right-to-manage bargaining, which causes involuntary unemployment.
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- Olivier Blanchard & Francesco Giavazzi, 2003.
"Macroeconomic Effects Of Regulation And Deregulation In Goods And Labor Markets,"
The Quarterly Journal of Economics,
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- Olivier Blanchard & Francesco Giavazzi, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," NBER Working Papers 8120, National Bureau of Economic Research, Inc.
- Olivier Blanchard & Francesco Giavazzi, . "Macroeconomic effects of regulation and deregulation in goods and labor markets," Working Papers 187, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Blanchard, Olivier J & Giavazzi, Francesco, 2001. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labour Markets," CEPR Discussion Papers 2713, C.E.P.R. Discussion Papers.
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NBER Working Papers
4149, National Bureau of Economic Research, Inc.
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- Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
- Tapio Palokangas, 2002.
"The Political Economy of Collective Bargaining,"
CESifo Working Paper Series
719, CESifo Group Munich.
- Dixit, Avinash & Grossman, Gene M. & Helpman, Elhanan, 1997.
"Common Agency and Coordination: General Theory and Application to Government Policy Making,"
3450061, Harvard University Department of Economics.
- Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
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