Unions, monopolistic competition and unemployment

Rüdiger Wapler

No 180, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: This paper develops a general equilibrium dual labour market model which incorporates union bargaining with monopolistically competitive firms. It is shown that not only the degree of union bargaining power but also the market power firms possess on the product market have a positive influence on unemployment. The reason for this is that less intense product market competition increases the negotiated wage rates as well as the price mark-up firms charge over their marginal costs, both of which reduce labour demand. It is also shown that higher competition intensity will force firms to merge to larger units.

JEL-codes: J31 J42 J51 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:180

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