Competition, Work Rules and Productivity
More competitive markets are associated with higher productivity. However, changes in competition complicate productivity measurement since changing mark-ups may shift factor shares. This paper examines productivity measurement in markets with market power and restrictive work rules: rules that induce wages to be paid for non-productive labor hours. It develops a theoretical model to explain why workers would want restrictive work rules and how competition leads to their reduction. I model a monopoly firm whose workers dictate wages and work rules. Work rules allow workers to maintain both high levels of employment and wages. Competition reduce work rules and increase productivity by lowering mark-ups. The theoretical findings are consistent with the empirical literature on the impact of increasing competitive pressure on productivity.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jose E. Galdon-Sanchez & James A. Schmitz, Jr., 2003.
"Competitive pressure and labor productivity: world iron ore markets in the 1980s,"
Federal Reserve Bank of Minneapolis, issue Spr, pages 9-23.
- José E. Galdón-Sánchez & James A. Schmitz Jr., 2002. "Competitive Pressure and Labor Productivity: World Iron-Ore Markets in the 1980's," American Economic Review, American Economic Association, vol. 92(4), pages 1222-1235, September.
- Severin Borenstein & Joseph Farrell, 2007.
"Do investors forecast fat firms? Evidence from the gold-mining industry,"
RAND Journal of Economics,
RAND Corporation, vol. 38(3), pages 626-647, 09.
- Borenstein, Severin & Farrell, Joseph, 2006. "Do Investors Forecast Fat Firms? Evidence from the Gold Mining Industry," Competition Policy Center, Working Paper Series qt4h02v1jp, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Severin Borenstein & Joseph Farrell, 1999. "Do Investors Forecast Fat Firms? Evidence from the Gold Mining Industry," NBER Working Papers 7075, National Bureau of Economic Research, Inc.
- Berthold Herrendorf & Arilton Teixeira, .
"Barriers to Entry and Development,"
2167726, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Matthew F. Mitchell & Andrea Moro, 2006. "Persistent Distortionary Policies with Asymmetric Information," American Economic Review, American Economic Association, vol. 96(1), pages 387-393, March.
- Bridgman, Benjamin & Gomes, Victor & Teixeira, Arilton, 2011. "Threatening to Increase Productivity: Evidence from Brazil's Oil Industry," World Development, Elsevier, vol. 39(8), pages 1372-1385, August.
- Timothy Dunne & Shawn Klimek & James Schmitz, Jr., 2010. "Competition and Productivity: Evidence from the Post WWII U.S. Cement Industry," Working Papers 10-29, Center for Economic Studies, U.S. Census Bureau.
- Helder Vasconcelos, 2005. "Tacit Collusion, Cost Asymmetries, and Mergers," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 39-62, Spring.
- Peter W. Wright & Paulo Bastos, 2012.
"Exchange Rates and Wages in Unionized Labor Markets,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 65(4), pages 975-999, October.
- Paulo Bastos & Peter Wright, . "Exchange rates and wages in unionised labour markets," Discussion Papers 10/15, University of Nottingham, GEP.
- Bridgman, Benjamin R. & Livshits, Igor D. & MacGee, James C., 2007. "Vested interests and technology adoption," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 649-666, April.
When requesting a correction, please mention this item's handle: RePEc:red:sed011:289. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.