Unemployment and the "Labour-Management Conspiracy"

The Economic Journal, Vol. 110, Issue 460, January 2000

Posted: 28 Nov 2000

See all articles by Larry S. Karp

Larry S. Karp

University of California, Berkeley

Abstract

We study a model in which management and a union bargain over a rule that will later determine the level of employment, and over a wage. The government then chooses an output or an employment subsidy. An exogenous natural turnover rate in the unionized sector creates unemployment whenever the union wage exceeds the competitive wage. Government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour, because of the induced change in the endogenous wage. Unemployment weakens but does not eliminate the possibility of a "labour-management conspiracy."

JEL Classification: J53, J64

Suggested Citation

Karp, Larry S., Unemployment and the "Labour-Management Conspiracy". The Economic Journal, Vol. 110, Issue 460, January 2000, Available at SSRN: https://ssrn.com/abstract=233423

Larry S. Karp (Contact Author)

University of California, Berkeley ( email )

Dept. of Agriculture & Resource Economics
313 Giannini Hall
Berkeley, CA 94720
United States
510-643-8911 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
441
PlumX Metrics