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Joerg Lingens
''Timing is Everything - The Labour Market Effects of Union Wage Bargaining''
( 2007, Vol. 10 No.5 )
This paper analyses the labour market effects of union wage bargaining for different sequences of the employment choice and the wage bargain. The result that collective bargaining decreases (firm-level) employment in a right-to-manage setting hinges on the assumption that employment is chosen by the firm after the wage bargain ("ex-ante" bargaining). Turning this sequence upside down ("ex-post" bargaining), the firm uses employment choice as a strategic variable for the wage bargain. Employment will be equal to the competitive case and wages will be higher. Although we strictly assume right-to-manage, the timing of the bargain ensures an efficient contract.
Keywords: right-to-manage
JEL: J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining: General
Manuscript Received : Apr 11 2007 Manuscript Accepted : Apr 30 2007

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