Wage and Employment Effects of Workplace Representation – A ""Right To Co-Manage"" Model

Yiquan Gu

No 178, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper introduces a two-stage union-oligopoly-council model of wage and employment determination wherein at the first stage wage is negotiated through collective bargaining and at the second stage employment in each firm is co-determined by the employer and its works council. We provide a full characterization of the model outcome for all parameter values of bargaining power and co-determination power. In particular, works councils always increase employment while their impact on wage can be non-monotonic. Overall, individual works councils' pursuit of own workers' interests may well harm the workers as a union.

Keywords: Workplace representation; union-oligopoly bargaining; firm-council codetermination (search for similar items in EconPapers)
JEL-codes: J50 J54 L13 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:178

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