Gradual Collective Wage Bargaining

Tinbergen Institute Discussion Paper 16-004/V

16 Pages Posted: 22 Jan 2016

See all articles by Sabien Dobbelaere

Sabien Dobbelaere

Vrije Universiteit Amsterdam - Department of Economics; Tinbergen Institute; IZA Institute of Labor Economics

Roland Luttens

Amsterdam University College - VU University Amsterdam

Multiple version iconThere are 2 versions of this paper

Date Written: January 22, 2016

Abstract

This paper presents an alternative implementation of firm-level collective wage bargaining, where bargaining proceeds as a finite sequence of sessions between a firm and a union of variable size. We investigate the impact of such a 'gradual' union on the wage-employment contract in an economy with concave production. In a static framework, the resulting equilibrium is equivalent to the efficient bargaining outcome. In a dynamic framework with search frictions, we demonstrate that gradual collective wage bargaining coincides with all-or-nothing bargaining when bargaining takes place in fictitious time before production.

Keywords: collective bargaining, gradual union, firm, search frictions, employment-at-will

JEL Classification: J30, J41, J51

Suggested Citation

Dobbelaere, Sabien and Luttens, Roland, Gradual Collective Wage Bargaining (January 22, 2016). Tinbergen Institute Discussion Paper 16-004/V. Available at SSRN: https://ssrn.com/abstract=2720252 or http://dx.doi.org/10.2139/ssrn.2720252

Sabien Dobbelaere (Contact Author)

Vrije Universiteit Amsterdam - Department of Economics ( email )

De Boelelaan 1105
NL- Amsterdam, NL-1081 HV
Netherlands
0031 20 598 28 74 (Phone)

Tinbergen Institute

Keizersgracht 482
NL- Amsterdam, NL-1017 EG
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
D- Bonn, 53072
Germany

Roland Luttens

Amsterdam University College - VU University Amsterdam ( email )

Plantage Muidergracht 14
Amsterdam, 1018TV
Netherlands

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