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Preferences for collective versus individualised wage setting

Boeri, Tito and Burda, Michael C. (2009) Preferences for collective versus individualised wage setting. The Economic Journal, 119 (540). pp. 1440-1463. ISSN 0013-0133

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Identification Number: 10.1111/j.1468-0297.2009.02286.x


Standard models of equilibrium unemployment assume exogenous labour market institutions and flexible wage determination. This article models wage rigidity and the coverage of collective bargaining endogenously, when workers differ by observable skill and may adopt either individualised or collective wage bargaining. In the calibrated model, a substantial fraction of workers and firms as well as the median voter prefer collective bargaining to the decentralised regime. A fundamental distortion of the separation decision in the form of a firing tax is necessary for these preferences to emerge. Endogenous coverage of collective bargaining can significantly modify the model's comparative statics predictions.

Item Type: Article
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Additional Information: © 2009 The Author(s). Journal compilation, Royal Economic Society
Divisions: LSE
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Date Deposited: 01 Jul 2014 11:26
Last Modified: 20 Apr 2021 02:10

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