Unemployment and the ‘Labour-Management Conspiracy'


Karp, L.S. and Paul, T. (2000) Unemployment and the ‘Labour-Management Conspiracy'. Economic Journal, 110, (460), 113-135. (doi:10.1111/1468-0297.00493).

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Original Publication URL: http://dx.doi.org/10.1111/1468-0297.00493

Description/Abstract

We study a model in which management and a union bargain over a rule that will later determine the level of employment, and over a wage. The government then chooses an output or an employment subsidy. An exogenous natural turnover rate in the unionised sector creates unemployment whenever the union wage exceeds the competitive wage. Government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour, because of the induced change in the endogenous wage. Unemployment weakens but does not eliminate the possibility of a 'labour-management conspiracy'.

Item Type: Article
Related URLs:
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
J Political Science > JA Political science (General)
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33489
Date Deposited: 19 Jul 2006
Last Modified: 27 Mar 2014 18:20
Contact Email Address: L.S.Karp@soton.ac.uk
URI: http://eprints.soton.ac.uk/id/eprint/33489

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