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Bargaining Over Employment as a Firm Strategic Choice

Author

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  • Bughin, Jacques

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This note provides a simple theoretical arguments, borrowed from the managerial incentives literature, as to why unionized firms acting non-cooperatively in the output market may find optimal to commit to bargaining outcomes off their (static) labor demand curve, hence restricting their behavior to non-profit maximizing practices. The theoretical model shows that power over labor conceded strategically to the union by the firm is negatively linked to union power over wages. Regression analyses on a cross-section of Belgian manufacturing firms seem to support the prediction that bargaining power over employment depends on product market structure and variables affecting union wages.

Suggested Citation

  • Bughin, Jacques, 1992. "Bargaining Over Employment as a Firm Strategic Choice," LIDAM Discussion Papers IRES 1992017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1992017
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