Gradual Collective Wage Bargaining

16 Pages Posted: 8 Feb 2016

See all articles by Sabien Dobbelaere

Sabien Dobbelaere

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

Roland Iwan Luttens

Ghent University - Department of Social Economics

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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 Iwan, Gradual Collective Wage Bargaining. IZA Discussion Paper No. 9691. Available at SSRN: https://ssrn.com/abstract=2728564

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 Iwan Luttens

Ghent University - Department of Social Economics ( email )

Hoveniersberg 24
Gent, 9000
Belgium

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