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Insider bargaining power, starting wages and involuntary unemployment
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Pennsylvania State University, University Park, USA.
2000 (English)In: Scandinavian Journal of Economics, ISSN 0347-0520, E-ISSN 1467-9442, Vol. 102, no 4, 669-688 p.Article in journal (Refereed) Published
Abstract [en]

Recent studies of wage bargaining and unemployment have emphasized the distinction between insiders and outsiders, and that unions act in the interest of insiders. Yet it is typically assumed that insiders and recently hired outsiders are paid the same wage. We consider a model where the starting wage may differ from the insider wage, but incentive constraints associated with turnover affect the form of the contract. We examine under what conditions the starting wage is linked to the insider wage so that increased bargaining power of insiders raises the starting wage and reduces the hiring of outsiders.

Place, publisher, year, edition, pages
2000. Vol. 102, no 4, 669-688 p.
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URN: urn:nbn:se:uu:diva-36005DOI: 10.1111/1467-9442.00220ISI: 000170130700007OAI: oai:DiVA.org:uu-36005DiVA: diva2:63904
Available from: 2008-10-17 Created: 2008-10-17 Last updated: 2013-10-29Bibliographically approved

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Gottfries, Nils
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