Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/33864 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 2401
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
In this note, we extend the traditional search and matching framework to take account of the different levels at which negotiations take place. We show that, in the absence of any distortion, sector-level bargaining ought to be less efficient than bargaining taking place at the other levels. It follows that the introduction of labor market policies as a combination of employment protection, hiring subsidy and payroll tax improves efficiency. This result suggests that the relationship between the level at which bargaining takes place and the labor market performance is far more conditional than most studies acknowledge.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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