Regulation with Wage Bargaining

Espen R. Moen, Dag Morten Dalen and Nils-Henrik M. von der Fehr

No 3748, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In many regulated industries labour unions are strong and there is clear empirical evidence of labour rent-sharing. In this Paper, we study optimal regulation in a model in which wages are determined endogenously by wage bargaining at the firm level. A seemingly robust conclusion, at least when worker bargaining power is considerable, is that incentives for cost efficiency should be stronger than in the standard case in which wages do not depend on the regulatory regime.

Keywords: regulation; wage bargaining (search for similar items in EconPapers)
JEL-codes: J30 L51 (search for similar items in EconPapers)
Date: 2003-02
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