A MATHEMATICAL MODEL OF A MACRO-FOCUSED LABOR UNION

Shuntian Yao and Soon Beng Chew ()
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Shuntian Yao: School of International Business and Trade, Tan Kah Kee College, Xiamen University, China
Soon Beng Chew: Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore

The Singapore Economic Review (SER), 2014, vol. 59, issue 04, 1-10

Abstract: This paper investigates the roles played by a macro-focused union in the stabilization of the employment level and wages during periods of demand shocks. A macro focused union sets the wage at the level which maximizes employment and provides union benefits to union members to counter free ridership. We set up a solid micro-foundation to derive the industry labor demands in normal periods and in periods with shocks. We argue that the roles played by the macro focused union lead to a more stable employment level which is beneficial to both the employers and employees.

Keywords: Labor demand; labor supply; cooperative bargaining; shifts of the labor demand curve; J01; J51; C02; C71 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0217590814500362

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