Unemployment and the ‘Labour-Management Conspiracy'
Unemployment and the ‘Labour-Management Conspiracy'
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'.
113-135
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Paul, T.
5cfba2a4-eed9-41d1-99d7-e0c373842649
2000
Karp, L.S.
261a5c1b-3f91-478a-bf2e-62793dba16fb
Paul, T.
5cfba2a4-eed9-41d1-99d7-e0c373842649
Karp, L.S. and Paul, T.
(2000)
Unemployment and the ‘Labour-Management Conspiracy'.
Economic Journal, 110 (460), .
(doi:10.1111/1468-0297.00493).
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'.
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Published date: 2000
Organisations:
Economics
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Local EPrints ID: 33489
URI: http://eprints.soton.ac.uk/id/eprint/33489
ISSN: 0013-0133
PURE UUID: b67a9399-75b8-40b7-b21b-7d8707059ad2
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Date deposited: 19 Jul 2006
Last modified: 15 Mar 2024 07:44
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Author:
L.S. Karp
Author:
T. Paul
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