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Imperfect Goods and Labor Markets, and the Union Wage Gap

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  • Helge Sanner

Abstract

Existing theoretical literature fails to explain the differences between the pay of workers that are covered by union agreements and others who are not. This study aims at closing this gap by a single general- equilibrium approach that integrates a dual labor market and a two- sector product market. Our results suggest that the so­ called 'union wage gap' is largely determined by the degree of centralization of the bargains, and, to a somewhat lesser extent, by the expenditure share of the unionized sector's goods.

Suggested Citation

  • Helge Sanner, 2003. "Imperfect Goods and Labor Markets, and the Union Wage Gap," Volkswirtschaftliche Diskussionsbeiträge 55, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
    • Handle: RePEc:pot:vwldis:55
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    Cited by:

    1. Norbert Eickhof & Kathrin Isele, 2005. "Do Economists Matter? Eine politökonomische Analyse des Einflusses wettbewerbspolitischer Leitbilder auf die europäische Fusionskontrolle," Volkswirtschaftliche Diskussionsbeiträge 74, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
    2. Gert Kneis & Klaus Schöler, 2002. "Zur Begründung der linearen Nachfragefunktion in der Haushaltstheorie," Volkswirtschaftliche Diskussionsbeiträge 48, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
    3. David G. Blanchflower & Alex Bryson, 2010. "The Wage Impact of Trade Unions in the UK Public and Private Sectors," Economica, London School of Economics and Political Science, vol. 77(305), pages 92-109, January.
    4. Wolf Dieter Heinbach & Markus Spindler, 2007. "To Bind or Not to Bind Collectively? Decomposition of Bargained Wage Differences Using Counterfactual Distributions," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 294/2007, Department of Economics, University of Hohenheim, Germany.
    5. Verena L. Holzer, 2004. "Does the German Renewable Energies Act fulfil Sustainable Development Objectives?," Volkswirtschaftliche Diskussionsbeiträge 73, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
    6. Do Truong Giang, 2004. "Tariffs and export subsidies in a spatial economic model," Volkswirtschaftliche Diskussionsbeiträge 65, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
    7. Klaus Schöler, 2007. "Gibt es eine optimale Stadtgröße?," Volkswirtschaftliche Diskussionsbeiträge 89, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.

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    More about this item

    Keywords

    Monopolistic competition; Dual labor market; Wage bargaining; Trade unions;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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