Insider Power in Wage Determination

David Blanchflower, Andrew Oswald and Mario D. Garrett

No 3179, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper argues that wage determination is best seen as a kind of rent sharing in which workers' bargaining power is influenced by conditions in the external labour market. It uses British establishment data from 1984 to show that pay depends upon a blend of insider pressure (including the employer's financial performance and oligopolistic position) and outsider pressure (including external wages and unemployment). Lester's feasible 'range' of wages appears typically to be between 8% and 22% of pay. Estimates of the unemployment elasticity of the wage lie in a narrow band around -0.1.

Date: 1989-11
Note: LS
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Citations: View citations in EconPapers (63)

Published as Economica, Vol. 57, pp. 143-170, (1990).

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Working Paper: INSIDER POWER IN WAGE DETERMINATION (1988)
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