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Centralized Bargaining, Multi-Tasking and Work Incentives

  • Lindbeck, Assar

    ()

    (Institute for International Economic Studies, Stockholm University)

  • Snower, Dennis J.

    ()

    (Department of Economics, Birkbeck College)

The paper examines the implications of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking - for centralized wage bargaining. The analysis shows how, on account of this reorganization, centralized bargaining becomes increasingly nefficient and detrimental to firms’ profit opportunities, since it prevents firms from offering their employees adequate incentives to perform the appropriate mix of tasks. The paper also shows how centralized bargaining inhibits firms from using wages to induce workers to learn how to use their experience from one set of tasks to enhance their performance at other tasks. In this way, the paper helps explain the increasing resistance to centralized bargaining in various advanced market economies.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 620.

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Length: 11 pages
Date of creation: 30 Oct 1997
Date of revision:
Handle: RePEc:hhs:iiessp:0620
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/

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  23. Gary S. Murphy Becker & Kevin M., 1992. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - George G. Stigler Center for Study of Economy and State 79, Chicago - Center for Study of Economy and State.
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  27. Brown, William & Walsh, Janet, 1991. "Pay Determination in Britain in the 1980s; the Anatomy of Decentralization," Oxford Review of Economic Policy, Oxford University Press, vol. 7(1), pages 44-59, Spring.
  28. Driffill, John & van der Ploeg, Frederick, 1993. "Monopoly Unions and the Liberalisation of International Trade," Economic Journal, Royal Economic Society, vol. 103(417), pages 379-85, March.
  29. Jeffrey B. Arthur, 1992. "The link between business strategy and industrial relations systems in American steel minimills," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 488-506, April.
  30. John W. Budd, 1992. "The determinants and extent of UAW pattern bargaining," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 523-539, April.
  31. Hoel, Michael, 1989. "Efficiency wages and local versus central wage bargaining," Economics Letters, Elsevier, vol. 30(2), pages 175-179, August.
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