Union Bargaining Power, Relative Wages, and Efficiency in Canada

Canadian Journal of Economics, Vol. 33, Issue 3, August 2000

Posted: 21 Jul 2001

See all articles by Timothy C. G. Fisher

Timothy C. G. Fisher

Wilfrid Laurier University

Robert Waschik

Centre of Policy Studies

Abstract

We use a computable general equilibrium model incorporating trade unions, efficient Nash contracts, existing distortions, and international trade to measure the deadweight loss in Canada arising from the ability of unions to raise wages above competitive levels. The model incorporates two features new to CGE analysis: parameterization of union bargaining power and variations in union preferences. Estimates indicate the deadweight loss to be no more than 0.04 per cent of GNP. However, the small aggregate effect masks considerable adjustments at the industry level, in imports and exports, and in the distribution of income. Adjustments are also larger with employment-oriented unions.

Suggested Citation

Fisher, Timothy and Waschik, Robert, Union Bargaining Power, Relative Wages, and Efficiency in Canada. Canadian Journal of Economics, Vol. 33, Issue 3, August 2000, Available at SSRN: https://ssrn.com/abstract=247375

Timothy Fisher (Contact Author)

Wilfrid Laurier University ( email )

Economics
Waterloo, Ontario N2L 3C5
Canada
519-884-0710 (2671) (Phone)
519-888-1015 (Fax)

Robert Waschik

Centre of Policy Studies ( email )

Victoria University
Melbourne, Victoria 8001
Australia
+613 9919 1062 (Phone)

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