Efficiency Wages, Unio-Firm Bargaining, and Strikes
We consider efficiency wage effects in a union-firm bargaining model with private information. We show that efficiency wage effects do not necessarily increase the wage level at equilibrium. However, if it is commonly known that the union is stronger than the firm and the productivity enhancing effects of paying higher wages are sufficiently large, then efficiency wage effects still increase the wage of equilibrium. More surprisingly, we show that efficiency wage effects increase the strike activity.
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- Vannetelbosch, Vincent J., 1993.
"Testing Between Alternative Wage-Employment Bargaining Models Using Belgian Aggreggate Data,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1994012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 27 Apr 1994.
- Vannetelbosch, Vincent J., 1996. "Testing between alternative wage-employment bargaining models using Belgian aggregate data," Labour Economics, Elsevier, vol. 3(1), pages 43-64, August.
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