Affordable Access

Publisher Website

Efficiency wages and local versus central wage bargaining

Authors
Journal
Economics Letters
0165-1765
Publisher
Elsevier
Publication Date
Volume
30
Issue
2
Identifiers
DOI: 10.1016/0165-1765(89)90058-x
Disciplines
  • Economics

Abstract

Abstract A simple efficiency wage model is extended to allow for the presence of unions. The presence of unions aggravates the unemployment caused by efficiency wage considerations. Provided the labour demand elasticity is not too much larger than one, local (firm level) wage bargaining gives a higher negotiated wage than central wage bargaining, implying higher unemployment under local wage bargaining than under central wage bargaining.

There are no comments yet on this publication. Be the first to share your thoughts.