Collective bargaining, firm heterogeneity and unemployment

Juan F Jimeno and Carlos Thomas

No 1131, Working Papers from Banco de España

Abstract: We compare labor market outcomes under firm-level and sector-level bargaining in a one-sector Mortensen-Pissarides economy with firm-specific productivity shocks. Our main theoretical results are twofold. First, unemployment is lower under firm-level bargaining Second, introducing efficient opting-out of sector-level agreements suffices to bring unemployment down to its level under decentralized bargaining. For an archetypical contintental European calibration, we find that the unemployment rate is about 5 percentage points lower under firm-level bargaining or efficient opting out than under sector-level bargaining.

Keywords: Collective bargaining; firm-specific shocks; wage compression; unemployment (search for similar items in EconPapers)
JEL-codes: E10 J64 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-12
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Collective bargaining, firm heterogeneity and unemployment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1131

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