Unionisation Structures and Innovation Incentives

Justus Haucap and Christian Wey

No 21/2003, Working Paper from Helmut Schmidt University, Hamburg

Abstract: This paper examines how different unionisation structures affect firms' innovation incentives and industry employment. We distinguish three modes of unionisation with increasing degree of centralisation: (1) "Decentralisation" where wages are determined independently at the firm-level, (2) "coordination" where one industry union sets individual wages for all firms, and (3) "centralisation" where an industry union sets a uniform wage rate for all firms. While firms' investment incentives are largest under "centralisation", investment incentives are non-monotone in the degree of centralisation: "Decentralisation" carries higher investment incentives than "coordination". Labour market policy can spur innovation by decentralising unionisation structures or through non-discrimination rules.

JEL-codes: D43 J50 K31 L13 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2003-09
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Related works:
Journal Article: Unionisation structures and innovation incentives (2004)
Working Paper: Unionisation Structures and Innovation Incentives (2004)
Working Paper: Unionization Structures and Innovation Incentives (2003)
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