Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20636
Authors: 
Madsen, Jakob B.
Goerke, Laszlo
Year of Publication: 
2003
Series/Report no.: 
IZA Discussion paper series 701
Abstract: 
We show that a stronger earnings relationship of unemployment compensation reduces wages and increases employment in an economy in which wages are determined by a trade union that maximises the rent from unionisation. The opposite result applies for a utilitarian union. Using manufacturing and non-manufacturing data for 16 OECD countries, estimates suggest that a 10% increase in the earnings relationship is associated with a 1.9% fall in manufacturing wages, a 0.6% reduction in non-manufacturing wages and a 7.3% reduction in unemployment.
Subjects: 
earnings relationship
OECD
panel data
trade union
unemployment
unemployment benefits
JEL: 
E24
J51
J65
Document Type: 
Working Paper

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