Wage formation in a unionized economy

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1. Verfasser: Uddén-Jondal, Eva (VerfasserIn)
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Veröffentlicht: Stockholm School of Economics, Economic Research Inst. 1993
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adam_text Contents Hi CONTENTS 1. INTRODUCTION AND SUMMARY 1.1 Introduction 1 1.2 Decentralized - centralized wage setting 5 1.3 Independent - interdependent utilities of workers 11 1.3.1 Specifying the utility functions 15 1.3.2 The non-employment state 17 1.4 Negotiated wages - wage drift 19 1.5 Summary of dissertation 1.5.1 Chapter 2: Decentralized wage setting - a reference case 25 1.5.2 Chapter 3: Centralized wage setting - the Swedish case? 28 1.5.3 Chapter 4: Wage formation and the impact of envy 32 1.5.4 Chapter 5: Egalitarian wage policy and wage drift 35 PART I: WAGE FORMATION WHEN WORKERS ARE HETEROGENEOUS AND EXPERIENCE ENVY 2. DECENTRALIZED WAGE SETTING - a reference case 2.1 Introduction 39 2.2 Basic model 2.2.1 Production 41 2.2.2 Trade unions 42 2.2.3 Individual workers preferences 43 iv WAGE FORMATION IN A UNIONIZED ECONOMY 2.2.4 Trade unions optimization problem 45 2.2.5 Labor demand conditions 46 2.2.6 Union indifference curves 48 2.3 Wage formation with two rivalrous trade unions 2.3.1 A Nash non-cooperative game 53 2.3.2 The reaction functions 55 2.3.3 Equilibrium relative wages 58 2.3.4 A parametric shift implying (R2) 66 2.4 Summary 69 3. CENTRALIZED WAGE SETTING - the Swedish case? 3.1 Introduction 71 3.2 The Central Trade Union s optimization problem 73 3.3 Wage effects from differing welfare weights 3.3.1 Relative wages when symmetric labor demand conditions 78 3.3.2 The Utilitarian CTU 84 3.3.3 The Median Voter CTU 86 3.4 Wage effects from differing labor demands 3.4.1 Relative wages when asymmetric labor demand conditions 89 3.4.2 The Utilitarian CTU 91 3.4.3 The Median Voter CTU 93 3.5 The Egalitarian CTU 97 3.6 Summary and discussion 103 Contents v PART II: EXTENSIONS AND APPLICATIONS FOR A COBB-DOUGLAS PRODUCTION TECHNOLOGY 4. WAGE FORMATION AND THE IMPACT OF ENVY 4.1 Introduction 109 4.2 Decentralized wage setting 4.2.1 Labor demand conditions 113 4.2.2 Individual workers 115 4.2.3 A Nash non-cooperative game 116 4.3 Centralized wage setting 4.3.1 Welfare function 121 4.3.2 Impact of envy on the absolute wages 124 4.3.3 Impact of envy on the relative wages 127 4.4 Summary and conclusions 131 5. EGALITARIAN WAGE POLICY AND WAGE DRIFT 5.1 Introduction 139 5.2 Wage setting by a myopic egalitarian CTU 144 5.3 Labor market conditions of different egalitarian wages 5.3.1 Recognizing the effective labor demands 148 5.3.2 Pin-pointing the egalitarian wage 151 5.3.3 Excess demand of skilled workers 155 5.4 Wage setting when a CTU anticipates wage drift 5.4.1 A non-myopic egalitarian CTU 161 5.4.2 A pseudo-egalitarian CTU 162 5.4.3 Welfare of different wage policies 164 5.5 Summary and conclusions 165 vi WAGE FORMATION IN A UNIONIZED ECONOMY APPENDIX (A) Al. Demand of labor 111 A2. Input substitutability and complementarity 180 A3. Elasticities of labor demand 183 A4. Properties of the labor demand functions in w and r 186 A5. Properties of the labor demand functions in 9 188 A6. The trade union s objective function 190 APPENDIX (B) Bl. Decentralized wage setting when workers are envious 205 B2. Centralized wage setting when workers are envious 206 B3. Centralized wage setting: Second Order Conditions 208 B4. Impact of envy when non-employed workers are envious as well; decentralized wage setting 208 B5. Impact of envy when non-employed workers are envious as well: centralized wage setting 210 REFERENCES 217 Contents vii LIST OF FIGURES Figure 2:1 Envy and spillover effects: substitute workers 52 Figure 2:2a Substitutes with envy effect spillover effect or complements 64 Figure 2:2b Substitutes with spillover effect envy effect 65 Figure 3:1 THE UTILITARIAN CENTRAL TRADE UNION - SYMMETRY a substitutes with envy effect spillover effect or complements 79 b substitutes with spillover effect envy effect 80 Figure 3:2 THE MEDIAN VOTER CENTRAL TRADE UNION - SYMMETRY complementary workers 88 Figure 3:3 THE UTILITARIAN CENTRAL TRADE UNION - ASYMMETRY a substitutes with envy effect spillover effect or complements 94 b substitutes with spillover effect envy effect 95 Figure 3:4 THE EGALITARIAN CENTRAL TRADE UNION - ASYMMETRY substitutes with envy effect spillover effect or complements 102 Figure 5:1 The contract curve as perceived by a myopic CTU 147 Figure 5:2 Skilled workers full employment factor price frontier 152 Figure 5:3 Pareto efficient wage frontier of a CTU which anticipates wage drift 168 viii WAGE FORMATION IN A UNIONIZED ECONOMY Figure Bl Decentralized wage setting a when b = b 213 b when (bVbu) = (a//3) 214 Figure B2 Decentralized and centralized wage setting when (bVbu) = (a/0) and v - 1 215 LIST OF TABLES Table 3:1 SYMMETRIC LABOR DEMAND CONDITIONS 6 = 0 substitutes with envy effect spillover effect or complements (case (A)) 107 Table 3:2 ASYMMETRIC LABOR DEMAND CONDITIONS 6 0 substitutes with envy effect spillover effect or complements (case (A)) 108 Table 4:1 Comparative statics properties at different alternative wages 126 Table 4:2 A Wage setting when workers do not experience envy 136 Table 4:2 B Wage setting when workers experience envy 137 Table 5:1 Parameter values granting skilled workers excess demand 160 Table 5:2 WELFARE OF CONSTITUENT UNIONS UNDER DIFFERENT WAGE POLICIES A a = 0.4 B = 0.1 5 = 0.6 N = 100 £ = 100 169 Contents ix B a. = 0.3 /3 = 0.1 5 = 0.6 N = 100 £ = 230 171 C a = 0.2 /3 = 0.1 5 = 0.6 A1 = 100 £ = 395 173 Table 5:3 Wei/are o/ Central Trade Union for different weighting schemes 175 Table A:l SUFFICIENCY CONDITIONS when the firm produces with CD-CES technology A for substitute workers N 0 and N 0 203 w r B for complement workers N 0 N 0 w r and p 0 204 Table B:l Comparative statics properties at different alternative wages when non-employed workers are envious as well 212
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Wage formation in a unionized economy Eva Uddén-Jondal
Stockholm School of Economics, Economic Research Inst. 1993
X, 222 S.
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Zugl.: Stockholm, School of Economics, Diss.
(DE-588)4113937-9 Hochschulschrift gnd-content
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spellingShingle Uddén-Jondal, Eva
Wage formation in a unionized economy
subject_GND (DE-588)4113937-9
title Wage formation in a unionized economy
title_auth Wage formation in a unionized economy
title_exact_search Wage formation in a unionized economy
title_full Wage formation in a unionized economy Eva Uddén-Jondal
title_fullStr Wage formation in a unionized economy Eva Uddén-Jondal
title_full_unstemmed Wage formation in a unionized economy Eva Uddén-Jondal
title_short Wage formation in a unionized economy
title_sort wage formation in a unionized economy
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