Unemployment and the 'Labour-Management Conspiracy.'

Larry Karp and Thierry Paul

Economic Journal, 2000, vol. 110, issue 460, 113-35

Abstract: We study a model in which management and a union bargain over a rule that will later determine the level of employment, and over a wage. The government then chooses an output or an employment subsidy. An exogenous natural turnover rate in the unionised sector creates unemployment whenever the union wage exceeds the competitive wage. Government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour, because of the induced change in the endogenous wage. Unemployment weakens but does not eliminate the possibility of a "labour-management conspiracy".

Date: 2000
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Related works:
Working Paper: Unemployment and the "Labour-Management Conspiracy" (1998)
Working Paper: Unemployment and the "Labour-Management Conspiracy" (1998)
Working Paper: Unemployment and the "Labour-Management Conspiracy" (1998)
Working Paper: Unemployment and the 'Labour-Management Conspiracy' (1997)
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