Wage Bargaining Versus Efficiency Wages
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Author | : Jon Strand |
Publisher | : |
Total Pages | : 0 |
Release | : 2003 |
Genre | : |
ISBN | : |
We construct a model integrating the efficiency wage model of Shapiro-Stiglitz (1984) (SS), with an individual wage bargaining model in the Diamond-Mortensen-Pissarides (DMP) tradition where firms and workers form pairwise matches. We show that when workers may threaten to shirk on the job and there is individual wage bargaining, the wage is always higher and employment lower than in either the SS model, or the (appropriately modified) DMP model. When firms determine workers' efforts unilaterally, efforts are set inefficiently low in the SS model. In the bargaining model, effort is higher, and is first best when the worker non-shirking constraint does not bind. The overall equilibrium allocation may then be more or less efficient than in the SS model, but is always less efficient than in a pure bargaining model with no moral hazard.
Author | : Asbjørn Rødseth |
Publisher | : |
Total Pages | : 28 |
Release | : 1991 |
Genre | : Collective bargaining |
ISBN | : |
Author | : Steinar Holden |
Publisher | : |
Total Pages | : 14 |
Release | : 1988 |
Genre | : Collective bargaining |
ISBN | : |
Author | : Michael Hoel |
Publisher | : |
Total Pages | : 12 |
Release | : 1988 |
Genre | : |
ISBN | : 9788257083830 |
Author | : Jon Strand |
Publisher | : |
Total Pages | : |
Release | : 1998 |
Genre | : |
ISBN | : |
Author | : Joan Muysken |
Publisher | : |
Total Pages | : 18 |
Release | : 1993 |
Genre | : |
ISBN | : |
Author | : Oddbjørn Raaum |
Publisher | : |
Total Pages | : 46 |
Release | : 1988 |
Genre | : Collective bargaining |
ISBN | : |
Author | : Frank Walsh |
Publisher | : |
Total Pages | : 10 |
Release | : 2005 |
Genre | : Efficiency wage theory |
ISBN | : |
Author | : George A. Akerlof |
Publisher | : Cambridge University Press |
Total Pages | : 196 |
Release | : 1986-11-28 |
Genre | : Business & Economics |
ISBN | : 9780521312844 |
The contributors explore the reasons why involuntary unemployment happens when supply equals demand.
Author | : Laszlo Goerke |
Publisher | : Springer Science & Business Media |
Total Pages | : 308 |
Release | : 2012-12-06 |
Genre | : Business & Economics |
ISBN | : 1461507871 |
This chapter has set out in detail the models which are employed below in order to analyse the labour market effects of changes in tax rates and in alterations in the tax structure. The fundamental mechanisms underlying the different approaches have been pointed out. Moreover, vital assumptions have been emphasised. By delineating the models which are used for the subsequent analyses, implicitly statements have also been made about topics or aspects which this study does not cover. For example, all workers and firms are identical ex ante. However, ex-post differences are allowed for, inter alia, if unemploy ment occurs or if some firms have to close down. These restrictions indicate areas of future research insofar as that the findings for homogeneous workers or firms yield an unambiguous proposal for changes in tax rates or the tax structure in order to promote employment. This is because it would be desir able for tax policy to know whether the predicted effects also hold in a world with ex-ante heterogeneity. Furthermore, the product market has not played a role. Therefore, repercussions from labour markets outcomes on product demand - and vice versa - are absent. 55 Moreover, neither the process of capital accumulation, be it physical or human capital, nor substitution pos sibilities between labour and capital in the firms' production function are taken into account. Finally, international competition is not modelled.