The Single Mindedness Theory of Labor Unions

Emanuele Canegrati

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper I analyse a labor market where the wage is endogenously determined according to a Right-to-Manage bargaining process between a firm and a labor union whose members are partitioned into two social groups: the old and the young. Furthermore, I exploit the Single Mindedness theory, which considers the existence of a density function which endogenously depends on leisure. I demonstrate that, when preferences of the old for leisure are higher than those of the young and when the level of productivity of the young is higher than that of the old, the young suer from higher tax rates and gain higher level of wage rates and lower levels of leisure. Finally, since the old are more single minded than the young, they exploit their greater political power to get positive transfers from the young in a PAYG system.

Keywords: bargaining models; labor unions; political economy; single mindedness (search for similar items in EconPapers)
JEL-codes: D71 D72 D78 J22 J24 J51 J52 J58 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-lab and nep-pol
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