When is there more employment, with individual or collective wage bargaining?
García, José Ramón (Universitat de València)
Sorolla, Valeri (Universitat Autònoma de Barcelona. Departament d'Economia i d'Història Econòmica)

Date:	2019
Abstract:	In a standard Diamond-Mortensen-Pissarides labour market with frictions, the authors seek to determine when there is more employment with individual wage bargaining than with collective wage bargaining, using a wage equation generated by the standard total surplus sharing rule. Using a Cobb-Douglas production function, they find that if the bargaining power of the individual is high compared to the bargaining power of the union, there is more unemployment with individual wage setting and vice versa. When the individual worker and the union have the same bargaining power, if the cost of opening a vacancy is sufficiently high, there is more unemployment with individual wage setting. Finally, for a constant marginal product of labour production function AL, when the individual worker and the union have the same bargaining power, individual bargaining produces more unemployment.
Grants:	Agència de Gestió d'Ajuts Universitaris i de Recerca 2017-SGR-1765 Ministerio de Economía y Competitividad ECO2014-53150-R Ministerio de Economía y Competitividad FEDER/ECO2015-67602-P
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
Language:	Anglès
Document:	Article ; recerca ; Versió publicada
Subject:	Matching frictions ; Unemployment ; Individual and collective wage setting
Published in:	Economics, Vol. 13 (2019) , p. 2019-15, ISSN 1864-6042

DOI: 10.5018/economics-ejournal.ja.2019-15

26 p, 361.5 KB

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