Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33690
Authors: 
Danziger, Leif
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 2366
Abstract: 
This paper explains why a union and a firm might settle on a contract duration that may later be extended and characterizes the optimal backpay for the holdout period. It is shown that the choice between concluding a shorter contract that may be extended and immediately concluding a longer contract depends on the prevalence of the different types of uncertainty in the economy. It is also shown that the optimal backpay reduces the negative impact of nominal uncertainty on a worker's real income, but increases the worker's exposure to idiosyncratic uncertainty
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
254.31 kB





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