Market Power, Dismissal Threat and Rent Sharing: The Role of Insider and Outsider Forces in Wage Bargaining One of the predictions of the insider-outsider theory is that wages will be higher in sectors (firms) with high labor adjustment costs/high turnover costs. This prediction is tested empirically in this study, using an insider-outsider model and a longitudinal panel of large firms in Portu...

This paper investigates wage dynamics assuming the potential presence of dual wage stickiness: with respect to both the frequency as well as the size of wage adjustments. In particular, this paper proposes a structural model of wage inflation dynamics assuming that although workers adjust wage contracts at discrete time intervals, they are limited in their abilities to adjust wages as much as t...

The large increase in computer use has raised the question whether people have to be taught computer skills before entering the labour market. Using data from the 1997 Skills Survey of the Employed British Workforce, we argue that neither the increase in computer use nor the fact that particularly higher skilled workers use a computer provides evidence that computer skills are valuable. We comp...

This paper evaluates the extent of inter-industry and inter-regional wage spillovers across the UK. A large literature exists suggesting that wages elsewhere affect wage determination and levels of satisfaction, but this paper extends the analysis of wage determination to examine the effects of inward investment in the process. Thus far the specific effect of foreign wages on domestic wage dete...

In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to better exploit the information gathered by the worker, but also reduces the worker's incentives to gather information in th...

Business representatives and union leaders in highly industrialised countries often accuse the governments of lessdeveloped countries of practising social dumping in the sense of deliberately neglecting work-place safety legislation, codetermination rights and other fringe benefits which define the quality of workplaces. This paper refutes this view by modelling the transition path of a less-de...

Employees’ representatives at workplace (i.e. Works Councils) are an important component of industrial relations, in particular, in Europe. This institution has been considered as efficient mechanism to avoid the lack of communication between manager and employees [Freeman and Lazear (1995)]. However, we investigate the agency problems between workers and their representatives that are supposed...

Trade Policy and Labor Services: Final Status Options for the West Bank and Gaza This paper considers the policy options of the West Bank and Gaza (WBG) with respect to trade and the exports of labor services. It concludes that i) a non-discriminatory trade policy (NDTP) is unambiguously superior to an FTA with Israel; ii) the WBG should pursue a NDTP with all its neighbors, but only under the ...

Signaling in the Labor Market: New Evidence on Layoffs and Plant Closings In my asymmetric-information model of layoffs, high-productivity workers are more likely to be recalled to their former employer and may choose to remain unemployed rather than to accept a low-wage job. In this case, unemployment can serve as a signal of productivity, and duration of unemployment may be positively related...

11 Many authors have discussed an apparent shift to a new employment contract characterized 12 by less commitment between employer and employee, and closer ties between wages within the 13 enterprise and those in the external labor market. We study the issue of when people in the US 14 and Canada feel pay cuts are fair. In contrast to much previous discussion, we find no evidence 15 of increasi...