[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/tuedps/180.html
   My bibliography  Save this paper

Unions, monopolistic competition and unemployment

Author

Listed:
  • Wapler, Rüdiger
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.

Suggested Citation

  • Wapler, Rüdiger, 2000. "Unions, monopolistic competition and unemployment," Tübinger Diskussionsbeiträge 180, University of Tübingen, School of Business and Economics.
    • Handle: RePEc:zbw:tuedps:180
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/47537/1/312800975.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:econom:v:61:y:1994:i:244:p:457-73 is not listed on IDEAS
    2. Barry McCormick, 1990. "A Theory of Signalling During Job Search, Employment Efficiency, and "Stigmatised" Jobs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(2), pages 299-313.
    3. Laing, Derek, 1993. "A Signalling Theory of Nominal Wage Inflexibility," Economic Journal, Royal Economic Society, vol. 103(421), pages 1493-1510, November.
    4. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    5. Richard Layard & Stephen Nickell, 1990. "Is Unemployment Lower if Unions Bargain over Employment?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 773-787.
    6. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    7. Juan Dolado & Francis Kramarz & Steven Machin & Alan Manning & David Margolis & Coen Teulings, 1996. "The Economic Impact of Minimum Wages in Europe," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00353896, HAL.
    8. Brown, James N & Ashenfelter, Orley, 1986. "Testing the Efficiency of Employment Contracts," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 40-87, June.
    9. Ian M. McDonald & Robert M. Solow, 1985. "Wages and Employment in a Segmented Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(4), pages 1115-1141.
    10. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    11. Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 376-414, July.
    12. Gerard J. van den Berg & Geert Ridder, 1998. "An Empirical Equilibrium Search Model of the Labor Market," Econometrica, Econometric Society, vol. 66(5), pages 1183-1222, September.
    13. Amitava Dutt & Anindya Sen, 1997. "Union bargaining power, employment, and output in a model of monopolistic competition with wage bargaining," Journal of Economics, Springer, vol. 65(1), pages 1-17, February.
    14. Roberts, Mark A. & Staehr, Karsten & Tranaes, Torben, 2000. "Two-stage bargaining with coverage extension in a dual labour market," European Economic Review, Elsevier, vol. 44(1), pages 181-200, January.
    15. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    16. Huw. D. Dixon & Claus T. Hansen & Henrik J. Kleven, "undated". "Dual Labour Markets and Menu Costs: Explaining the Cyclicality of Productivity and Wage Differentials," Discussion Papers 99/1, Department of Economics, University of York.
    17. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
    18. Arnsperger, Christian & de la Croix, David, 1990. "Wage Bargaining with a Price-Setting Firm," Bulletin of Economic Research, Wiley Blackwell, vol. 42(4), pages 285-298, October.
    19. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koepke, Nikola & Baten, Joerg, 2005. "The biological standard of living in Europe during the last two millennia," European Review of Economic History, Cambridge University Press, vol. 9(1), pages 61-95, April.
    2. Stadler, Manfred, 2003. "Innovation and growth: The role of labor-force qualification," Tübinger Diskussionsbeiträge 255, University of Tübingen, School of Business and Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wapler, Rüdiger, 2001. "Unions, efficiency wages, and unemployment," Tübinger Diskussionsbeiträge 210, University of Tübingen, School of Business and Economics.
    2. Loïc Cadiou & Stéphanie Guichard & Mathilde Maurel, 2000. "Disparités institutionnelles et flexibilité des marchés du travail dans l'UE," Économie et Statistique, Programme National Persée, vol. 332(1), pages 49-63.
    3. Drydakis Nick, 2011. "Greek unions' preferences: measuring trends in the field. An exploratory note on the period 2008–2009," Transfer: European Review of Labour and Research, , vol. 17(4), pages 563-576, November.
    4. Aico Van Vuuren & Gerard J. Van Den Berg & Geert Ridder, 2000. "Measuring the equilibrium effects of unemployment benefits dispersion," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(6), pages 547-574.
    5. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
    6. Roberts, Mark A. & Staehr, Karsten & Tranaes, Torben, 2000. "Two-stage bargaining with coverage extension in a dual labour market," European Economic Review, Elsevier, vol. 44(1), pages 181-200, January.
    7. Beissinger, Thomas & Büsse, Oliver, 2002. "The Impact of the Unemployment Benefit System on International Spillover Effects," University of Regensburg Working Papers in Business, Economics and Management Information Systems 376, University of Regensburg, Department of Economics.
    8. Marcus Dittrich, 2010. "Minimum Wages and Unemployment Benefits in a Unionized Economy: A Game-Theoretic Approach," Annals of Economics and Finance, Society for AEF, vol. 11(2), pages 209-229, November.
    9. van Schaik, A.B.T.M. & de Groot, H.L.F., 2000. "Unemployment, growth and efficiency wages," Other publications TiSEM faa209e7-3a95-41b0-958f-0, Tilburg University, School of Economics and Management.
    10. José Ramón García & Valeri Sorolla, 2014. "Monopolistic Competition and Different Wage Setting Systems," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(1), pages 48-77, February.
    11. Dittrich, Marcus, 2007. "Minimum Wages and Union Bargaining in a Dual Labour Market," Dresden Discussion Paper Series in Economics 13/07, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    12. Peter J. Luke & Mark E. Schaffer, 1999. "Wage Determination in Russia: An Econometric Investigation," CERT Discussion Papers 9908, Centre for Economic Reform and Transformation, Heriot Watt University.
    13. Picard, Pierre M. & Toulemonde, Eric, 2006. "Firms agglomeration and unions," European Economic Review, Elsevier, vol. 50(3), pages 669-694, April.
    14. Anne Perrot & André Zylberberg, 1989. "Salaire d'efficience et dualisme du marché du travail," Revue Économique, Programme National Persée, vol. 40(1), pages 5-20.
    15. P R Agénor, 2005. "The Analytics of Segmented Labor Markets," Centre for Growth and Business Cycle Research Discussion Paper Series 52, Economics, The University of Manchester.
    16. Emmanuel Petrakis & Minas Vlassis, 1999. "The strategic role of minimum sectorial wages in oligopoly: a case for the Spanish labour market," Investigaciones Economicas, Fundación SEPI, vol. 23(3), pages 331-350, September.
    17. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October.
    18. Matthias Strifler & Thomas Beissinger, 2016. "Fairness Considerations in Labor Union Wage Setting – A Theoretical Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(3), pages 303-330, July.
    19. Marco de Pinto & Jörg Lingens, 2019. "Unionization, information asymmetry and the de‐location of firms," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(4), pages 1782-1823, November.
    20. Jens Suedekum, 2005. "Increasing returns and spatial unemployment disparities," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 159-181, June.

    More about this item

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:tuedps:180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/wftuede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.