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Unemployment and the ‘Labour-Management Conspiracy'

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

Record type: Article


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


Local EPrints ID: 33489
ISSN: 0013-0133
PURE UUID: b67a9399-75b8-40b7-b21b-7d8707059ad2

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Date deposited: 19 Jul 2006
Last modified: 17 Jul 2017 15:52

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Author: L.S. Karp
Author: T. Paul

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