Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18544
Authors: 
Haucap, Justus
Pauly, Uwe
Wey, Christian
Year of Publication: 
2006
Series/Report no.: 
DIW Discussion Papers 651
Abstract: 
In this paper we apply standard cartel theory to identify the major institutional stabilizers of Germany?s area tariff system of collective bargaining between a single industry union and the industry?s employers association. Our cartel analysis allows us to demonstrate that recent labor policy reforms that intend to make labor markets more ?flexible? further serve to stabilize the labor cartel while other pro-competitive proposals have failed. We argue that the pro-competitive recommendations failed exactly because of their destabilizing effects on insiders? incentives to stay in the labor cartel. We propose regulatory measures for injecting competition into Germany?s labor markets that focus on the creation of new options for firms and workers outside the existing area tariff system; in particular, by liberalizing existing barriers for the establishment of a fully tariff-enabled union. Such an endeavor must go hand in hand with the institutionalization of a competition policy framework for labor market disputes as any destabilizing policy inevitably provokes counter measures of the incumbent labor cartel so as to protect their dominance vis-?-vis outsider competition.
Subjects: 
Union
Collective Bargaining
Cartel Stability
Labor Market Reforms
JEL: 
K31
J52
L12
Document Type: 
Working Paper

Files in This Item:
File
Size
336.53 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.