Resource title

Union wage compression in a Right-to-Manage model

Resource image

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Resource description

Trade unions are consistently found to compress the wage distribution. Moreover, unemployment affects in particular low-skilled workers. The present paper argues that an extended Right-to-Manage model can account for both of these findings. In this model unions compress the wage distribution by raising wages of workers in low productivity industries (or low-skilled workers) above market clearing levels. Our analysis suggests that the most direct way to test this model would be via a test for stochastic dominance. We also allow for capital adjustments and compare union and non-union wage distributions in a general equilibrium framework.

Resource author

Thorsten Vogel

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25181

Resource license

Adapt according to the presented license agreement and reference the original author.