Unemployment and the 'Labour-Management Conspiracy'
Management and a union bargain sequentially, first choosing a contract which will later determine the level of employment, and those choosing a wage. The government then chooses an output subsidy, after which the industry chooses employment according to the contract. The presence of a natural turnover rate in the unionized sector creates unemployment whenever the union wage exceeds the competitive wage. Government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour. Intervention can also reverse the relation between the equilibrium amount of unemployment and the flexibility of the labour market. Government intervention is especially damaging when labour markets are inflexible. Unemployment weakens, but does not eliminate, the possibility of a ‘labour-management conspiracy’.
|Date of creation:||Oct 1997|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Karp, Larry & Paul, Thierry, 2000.
"Unemployment and the 'Labour-Management Conspiracy.',"
Royal Economic Society, vol. 110(460), pages 113-35, January.
- Karp, L. & Paul, T., 1998. "Unemployment and the "Labour-Management Conspiracy"," G.R.E.Q.A.M. 98a27, Universite Aix-Marseille III.
- Karp, Larry & Paul, Thierry, 1998. "Unemployment and the "Labour-Management Conspiracy"," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4w19p9qp, Department of Agricultural & Resource Economics, UC Berkeley.
- Karp, Larry & Paul, Thierry, 1997. "Unemployment and the 'Labour-Management Conspiracy'," CEPR Discussion Papers 1724, C.E.P.R. Discussion Papers.
- Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
- George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
- Rodrik, Dani, 1987. "Policy Targeting with Endogenous Distortions: Theory of Optimum Subsidy Revisited," The Quarterly Journal of Economics, MIT Press, vol. 102(4), pages 903-11, November.
- Burda, Michael C & Funke, Michael, 1992. "Trade Unions, Wages and Structural Adjustment in the New German States," CEPR Discussion Papers 652, C.E.P.R. Discussion Papers.
- Bean, Charles R, 1994.
"European Unemployment: A Survey,"
Journal of Economic Literature,
American Economic Association, vol. 32(2), pages 573-619, June.
- Matsuyama, Kiminori, 1990. "Export Subsidies as an Outcome of the Management-Labor Conspiracy," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 803-13, August.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
- David Begg & Richard Portes, 1993.
"Eastern Germany since unification: wage subsidies remain a better way,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 1(4), pages 383-400, December.
- Begg, David & Portes, Richard, 1992. "Eastern Germany Since Unification: Wage Subsidies Remain a Better Way," CEPR Discussion Papers 730, C.E.P.R. Discussion Papers.
- Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-39, March.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:1724. 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: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.