RT info:eu-repo/semantics/article
T1 Dynamic collective bargaining and labor adjustment costs
A1 Cabo García, Francisco José
A1 Martín Román, Ángel Luis
K1 Dynamic labor demand
K1 Collective wage bargaining
K1 Monopoly union model
K1 Adjustment costs
K1 Stackelberg differential game
AB Collective bargaining between a trade union and a firm is analyzedwithin the framework of a monopoly union model as a dynamic Stackelberg game.Adjustment costs for the firm are comprised of the standard symmetric convexcosts plus a wage-dependent element. Indeed, hiring costs can turn into benefits assuming wagediscrimination against new entrants.The union also bears increasing marginal costs in the number of layoff workers anddecreasing marginal benefits in the number of new entrants.Starting from a baseline scenario with instantaneous adjustment, we characterizethe conditions under which the adjustment costs for the firm, or forthe union, lead to higher employment and lower wages or vice versa. More generally,these adjustment costs, when they affect both the union and the firm,are generally detrimental to employment. However, the standard symmetric element of theadjustment costs for the firm positively affects employment, even with lower wages.Finally, if hiring and firing costs are defined separately,then hiring and firing could take place simultaneously if the wage discriminationtowards new entrants is strong, because the firm would agree topay the costs of firing incumbent employees, in order to enjoy wage savings from new entrants.
PB Springer
SN 0931-8658 (Print) 1617-7134 (Online)
YR 2018
FD 2018
LK http://uvadoc.uva.es/handle/10324/32320
UL http://uvadoc.uva.es/handle/10324/32320
LA spa
NO Journal of Economics, Online first
NO Producción Científica
DS UVaDOC
RD 24-abr-2024