Wage Bargaining and Unemployment Persistence

22 Pages Posted: 28 Mar 2001 Last revised: 15 Jul 2010

See all articles by Olivier J. Blanchard

Olivier J. Blanchard

National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics

Date Written: March 1991

Abstract

This paper looks at models of unemployment which make two central assumptions. The first is that wages are bargained between firms and employed workers, and that unemployment affects the outcome only to the extent that it affects the labor market prospects of either employed workers or of firms. The second is that the duration of unemployment affects either the search behavior or the skills of the unemployed, and/or the perceptions of firms of such skills. It argues that such models may explain riot only the evolution of European unemployment over the last two decades -an evolution which triggered their development, but many of the cyclical features of labor markets in general.

Suggested Citation

Blanchard, Olivier J., Wage Bargaining and Unemployment Persistence (March 1991). NBER Working Paper No. w3664. Available at SSRN: https://ssrn.com/abstract=264427

Olivier J. Blanchard (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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