Regulation with Wage Bargaining
Espen R. Moen
Norwegian School of Management; Centre for Economic Policy Research (CEPR)
Dag Morten Dalen
BI Norwegian Business School - Department of Economics
Nils-Henrik M. Von der Fehr
University of Oslo - Department of Economics
CEPR Discussion Paper No. 3748
In many regulated industries labour unions are strong and there is clear empirical evidence of labour rent-sharing. In this Paper, we study optimal regulation in a model in which wages are determined endogenously by wage bargaining at the firm level. A seemingly robust conclusion, at least when worker bargaining power is considerable, is that incentives for cost efficiency should be stronger than in the standard case in which wages do not depend on the regulatory regime.
Number of Pages in PDF File: 21
Keywords: Regulation, wage bargaining
JEL Classification: J30, L51working papers series
Date posted: March 7, 2003
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