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Union wage compression in a Right-to-Manage model

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  • Vogel, Thorsten

Abstract

Trade unions are consistently found to compress the wage distribution. Moreover, unemployment affects in particular low-skilled workers. The present paper argues that an extended Right-to-Manage model can account for both of these findings. In this model unions compress the wage distribution by raising wages of workers in low productivity industries (or low-skilled workers) above market clearing levels. Our analysis suggests that the most direct way to test this model would be via a test for stochastic dominance. We also allow for capital adjustments and compare union and non-union wage distributions in a general equilibrium framework.

Suggested Citation

  • Vogel, Thorsten, 2007. "Union wage compression in a Right-to-Manage model," SFB 649 Discussion Papers 2007-009, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2007-009
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    References listed on IDEAS

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    Cited by:

    1. Francisco Gomez & Raimundo Mac-Auliffe & Santiago Rosselot, 2014. "Brecha Productividad – Salario: Un Acercamiento Por Rama," Estudios Nueva Economía, Estudios Nueva Economía, vol. 3(1), pages 44-49.
    2. repec:bdu:ojijlp:v:1:y:2017:i:1:p:41-51:id:329 is not listed on IDEAS
    3. Teschner, Tatjana, 2009. "Der Einfluss der Tarifbindung auf Lohnhöhe und Lohnverteilung," Hannover Economic Papers (HEP) dp-431, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Michael C. Burda & Bernd Fitzenberger & Alexander Lembcke & Thorsten Vogel, 2008. "Unionization, Stochastic Dominance, and Compression of the Wage Distribution: Evidence from Germany," SFB 649 Discussion Papers SFB649DP2008-041, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

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    More about this item

    Keywords

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    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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