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Is competition or collusion in the product market relevant for labour markets ?

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  • Bergès-Sennou, F.
  • Caprice, S.

Abstract

The relationship between collusion on the product market and the resulting impact on the labour market is ambiguous in non-union models. Considering a dual labour market with qualified and unqualified workers, and taking into account the efficiency effect when employing qualified workers allows us to derive some conclusions. The framework is composed by two firms competing on the labour market for hiring workers and competing (or colluding) on the product market to sell their production. Qualified workers are herogeneous in their specialization. Firms sell imperfect substitute goods on the product market. First, if the two firms collude in prices on the product market, it leads to an increase in the symmetric equilibium wage in the labour market (in the absence of unions). Second, collusion favors the employment of qualified peope : fims hire qualified workers in order to benefit of higher productivity and cost decrease. The anti-competitive practice harms the unqualified workers and decrease the total employment level, but can rise the wage bill. ...French Abstract : Dans des modèles oû les syndicats ne sont pas présents, le lien entre la collusion sur le marché des biens et son impact sur le marché du travail est ambigu. Considérer un marché dual du travail oû se côtoient des ouvriers qualifiés et non qualifiés, en tenant compte de l'accroissement d'efficacité due à la présence d'ouvrier qualifié dans la firme, permet de tirer des conclusions. Le cadre d'analyse est composé de deux firmes qui se concurrencent sur le marché du travail pour le recrutement d'ouvriers, et qui se concurrencent (ou colludent) sur le marché des biens pour vendre leur production. Les ouvriers qualifiés sont hétérogènes dans leur spécialisation. Les biens vendus sur le marché final sont imparfaitement substituables. Un premier résultat est qu'une collusion sur le marché des biens aboutit à un salaire d'équilibre symétrique plus élevé sur le marché du travail (en l'absence de syndicats). Deuxièmement, la collusion favorise le recrutement d'employés qualifiés : les firmes sont incitées à recruter des ouvriers qualifiés afin d'accroître la productivité et les économies sur les coûts. La collusion sur le marché des biens est préjudiciable aux travailleurs non qualifiés et à l'emploi total, mais elle peut cependant augmenter la masse salariale.

Suggested Citation

  • Bergès-Sennou, F. & Caprice, S., 2004. "Is competition or collusion in the product market relevant for labour markets ?," Economics Working Paper Archive (Toulouse) 200412, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
  • Handle: RePEc:rea:inrawp:200412
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    File URL: http://www.toulouse.inra.fr/centre/esr/wpRePEc/ber200412.pdf
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    References listed on IDEAS

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    1. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
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    Cited by:

    1. George Symeonidis, 2008. "Downstream Competition, Bargaining, and Welfare," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 247-270, 03.
    2. Pedro Gonzaga & António Brandão & Hélder Vasconcelos, 2013. "Theory of Collusion in the Labor Market," FEP Working Papers 477, Universidade do Porto, Faculdade de Economia do Porto.

    More about this item

    Keywords

    RENT-SHARING; EMPLOYMENT; OLIGOPOLY; COLLUSION ; MARCHE DE L'EMPLOI; THEORIE ECONOMIQUE; OLIGOPOLE; OUVRIER; SALAIRE; NIVEAU DE QUALIFICATION; CLAUSE DE NON CONCURRENCE; ANALYSE COUT AVANTAGE;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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