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Title:Union wage compression in a Right-to-Manage model PDF Logo
Authors:Vogel, Thorsten
Issue Date:2007
Series/Report no.:SFB 649 discussion paper 2007,009
Abstract:Trade unions are consistently found to compress the wage distribution. Moreover, unemployment affects in particular low-skilled workers. The present paper argues that an extended Right-to-Manage model can account for both of these findings. In this model unions compress the wage distribution by raising wages of workers in low productivity industries (or low-skilled workers) above market clearing levels. Our analysis suggests that the most direct way to test this model would be via a test for stochastic dominance. We also allow for capital adjustments and compare union and non-union wage distributions in a general equilibrium framework.
Subjects:Trade unions
wage compression
JEL:J51
J31
J41
J21
Document Type:Working Paper
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

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