Unemployment and the "Labour-Management Conspiracy"

Larry Karp and T. Paul

G.R.E.Q.A.M. from Universite Aix-Marseille III

Abstract: Management and a union bargain sequentilally, first choosing a contract which will later determine the level of employment, and then choosing a wage. The government then chooses an output subsidy, after which the industry chooses employment according to the contract. The presence of a natural turnover rate in the unionized 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; intervention can also reverse the relation between th eequilibrium amount of unemployment andthe flexibility of the labour market.

Keywords: UNEMPLOYMENT; WAGES; BARGAINING; SUBSIDIES (search for similar items in EconPapers)
JEL-codes: J58 J68 (search for similar items in EconPapers)
Pages: 36 pages
Date: 1998
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Related works:
Journal Article: Unemployment and the 'Labour-Management Conspiracy.' (2000)
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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Persistent link: https://EconPapers.repec.org/RePEc:fth:aixmeq:98a27

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