Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25181
Authors: 
Vogel, Thorsten
Year of Publication: 
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

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