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

Listed author(s):
  • Christophe Daniel

    (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

  • Catherine Sofer

    ()

    (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

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, we show the relevance of a further factor: a union power effect. Then we 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).

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Paper provided by HAL in its series Post-Print with number halshs-00367153.

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Length:
Date of creation: Jul 1998
Publication status: Published in Journal of Labor Economics, University of Chicago Press, 1998, 16 (3), pp.546-575. 〈10.1086/209898〉
Handle: RePEc:hal:journl:halshs-00367153
DOI: 10.1086/209898
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00367153
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  17. 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 3-39, June.
  18. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  19. Hersch, Joni, 1989. "Another look at compensating differentials," Journal of Behavioral Economics, Elsevier, vol. 18(1), pages 41-50.
  20. Biddle, Jeff E & Zarkin, Gary A, 1988. "Worker Preferences and Market Compensation for Job Risk," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 660-667, November.
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  22. 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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