Efficiency wages and union-firm bargaining

Gaia Garino, Christopher Martin

Research output: Contribution to journalArticle

15 Citations (Scopus)

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 languageEnglish
Pages (from-to)181-185
Number of pages5
JournalEconomics Letters
Volume69
Issue number2
Early online date18 Sep 2000
DOIs
Publication statusPublished - Nov 2000

Keywords

  • Wages,
  • Bargaining
  • Efficiency wages
  • Unions

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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