The Effect of the Initial Distribution of Labor-Related Property Rights on the Allocative Efficiency of Labor Markets

Helmut Dietl, Markus Lang, Johannes Orlowski () and Philipp Wegelin ()
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Johannes Orlowski: Department of Business Administration, University of Zurich
Philipp Wegelin: Lucerne University of Applied Sciences and Arts, Lucerne School of Business

No 398, Working Papers from University of Zurich, Department of Business Administration (IBW)

Abstract: We conduct an empirical study to examine the impact of the initial distribution of labor-related property rights on the allocative efficiency of labor markets for skilled workers in a highly competitive labor market (professional basketball). Specifically, we compare a regime where employers can trade workers to other employers without the worker's consent to one where workers have the right to negotiate freely with other employers and move without their employer's consent. Our results indicate that contrary to the predictions of the Coase Theorem, allocative efficiency decreases when workers have the initial right to negotiate freely and move to another employer.

Keywords: Coase theorem; labor market; allocative efficiency; productivity; sports as a lab (search for similar items in EconPapers)
JEL-codes: E24 J01 J21 L83 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2023-01
New Economics Papers: this item is included in nep-eff and nep-spo
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Persistent link: https://EconPapers.repec.org/RePEc:zrh:wpaper:398

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