Public sector wage settlement and the threat of outsourcing

Gervan Fearon

Atlantic Economic Journal, 2004, vol. 32, issue 3, 174 pages

Abstract: This paper investigates the impact of outsourcing on wage settlement in the public sector. The study characterizes the equilibrium wage offered by the public sector union to a government bureau competing against private sector firms. It is predicted that the union will offer a concession wage in an attempt to block outsourcing when its members' outside employment options are sufficiently unattractive and will offer a non-concession wage otherwise. The study contributes to the literature on outsourcing and wage determination in the public sector. Copyright International Atlantic Economic Society 2004

Date: 2004
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DOI: 10.1007/BF02299435

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