Unions and Efficient Training

Alison Booth and Monojit Chatterji

Economic Journal, 1998, vol. 108, issue 447, 328-43

Abstract: This paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. The firm has ex post monopsonistic power that drives trained workers' wages below the social optimum. The emergence of a trade union bargaining at the firm-level can increase social welfare by counterbalancing the firm's ex post monopsonistic power in wage determination. Local union-firm wage bargaining ensures that the posttraining wage is set sufficiently high to deter at least some quits, so that the number of workers the firm trains is nearer the social optimum.

Date: 1998
References: Add references at CitEc
Citations: View citations in EconPapers (51)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:108:y:1998:i:447:p:328-43

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().