IS UNEMPLOYMENT ALWAYS HIGHER WHEN INSIDERS DECIDE?

Trine Filges and Birthe Larsen
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Trine Filges: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark

No 13-2000, Working Papers from Copenhagen Business School, Department of Economics

Abstract: This paper challenges the traditional view that unemployment is high because insiders determine the union wage. The insiders in this paper are characterized by being more efficient when they search for a job than the outsiders, implying that they experience relatively less unemployment. We assume that wages are determined by a monopoly union and further that a union leader is elected by a majority voting rule. Insiders may prefer a lower wage than outsiders, implying the possibility of lower unemployment.

Keywords: Insiders and Outsiders; Search; Unemployment (search for similar items in EconPapers)
JEL-codes: J20 J50 J60 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2000-04-01
New Economics Papers: this item is included in nep-lab and nep-ltv
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Related works:
Working Paper: Is Unemployment Always Higher when Insiders Decide? (2000)
Working Paper: Is Unemployment Always Higher when Insiders Decide? (2000)
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