Increased price markup from union coordination: OECD panel evidence

Roger Bjørnstad () and Kjartan Øren Kalstad

No 2010-13, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Although coordination of wage bargaining probably affects entry barriers and competition in product markets, research on price determination has typically not considered such factors. In this paper the price markup depends on coordination and is estimated on a panel of 15 OECD countries. The estimates show that consumer prices may be as much as 21 percent higher in coordinated compared to uncoordinated countries, solely due to the effect of coordination on the price markup. Since coordination has a dampening effect on wages, this may explain why many researchers have been unable to find any clear effect of coordination on unemployment.

Keywords: Imperfect competition model; price markup; labor market institutions; unemployment; panel data model (search for similar items in EconPapers)
JEL-codes: C23 E31 J51 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-com, nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.economics-ejournal.org/economics/discussionpapers/2010-13
https://www.econstor.eu/bitstream/10419/30150/1/620462299.pdf (application/pdf)

Related works:
Working Paper: Increased Price Markup from Union Coordination. OECD Panel Evidence (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201013

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