Abstract
This paper combines the efficiency wage and union-firm bargaining approaches to wage determination to produce a unified model that leads to higher wages, confirming an original insight of Summers (Am. Econom. Rev. 78 (1988) 383). Increases in monopoly power on the goods market also have a stronger impact on wages when there are efficiency wage effects, but the proportional effect of bargaining and market power on the wage is independent of the proportional effect of efficiency wages. We also find that efficiency wage effects alter the form of the labour demand curve to make it backward bending.
| Original language | English |
|---|---|
| Pages (from-to) | 181-185 |
| Number of pages | 5 |
| Journal | Economics Letters |
| Volume | 69 |
| Issue number | 2 |
| Early online date | 18 Sept 2000 |
| DOIs | |
| Publication status | Published - Nov 2000 |
Keywords
- Wages,
- Bargaining
- Efficiency wages
- Unions
ASJC Scopus subject areas
- Finance
- Economics and Econometrics