The Solow condition is examined in an intertemporal model that blends the shirking and the turnover models of efficiency wages with managerial supervision. It is shown that the Solow condition does not hold when shirking and turnover costs are considered. The Solow condition can be a possible outcome when managerial productivity offsets shirking and turnover costs. JEL Classification: J50, J41,...

We develop a two-person negotiation model with complete information that makes endogenous both the deadline and the level of surplus destruction after the deadline. We show that the undominated Nash equilibrium outcome is always unique but might be inefficient. Moreover, as the bargaining period becomes short or as the players become very patient, the unique undominated Nash equilibrium outcome...

We construct a political equilibrium in which employers and labour unions bargain over labour contracts, wage-earners and profit-earners lobby the government for taxation and labour market regulation, and labour market legislation must be accepted by the majority of voters. We show that the voters rule out profit sharing, because otherwise the government would capture all the gain. Furthermore,...

We consider a two-country model of wage determination with private information in unionized, imperfectly competitive, industries. We investigate the effects of opening up markets to trade as well as of further market integration on the negotiated wage and the maximum delay in reaching an agreement. From an initial situation of two-way intraindustry trade, an increase in product market integrati...

This paper explains why some employees who favor unionization fail to join, and why others who wish to abandon union membership continue paying dues. Our explanation is based on a model where employees incur switching (search) costs when attempting to abandon (acquire) union membership. Empirical analysis for Britain confirms one of the main predictions from the switching-cost-model that segmen...

This paper measures the productivity impact of shop-floor employee involvement. On the basis of a representative German establishment data set, the study finds that the introduction of team-work and autonomous work groups, and a reduction of hierarchies in 1996/97 significantly increased average establishment productivity in 1997 – 2000. The estimation strategy controls for unobserved invariant...

This paper presents a new framework to analyze the effects of some economics factors on the U.S. distribution of wages. The paper seeks to specifically find the contributing factors of wage inequality and show how differently these factors influence wage dynamics at various points of the distribution. This paper provides valuable information of where in the wage distribution dynamics these fact...

Economic Integration, Market Power and Technological Change We examine a common market which expands by integrating new regions. Capitalists are strategically interdependent through the goods market and they improve their productivity through R&D. Production and R&D employ unionized workers. The purpose of integration is to maximize a weighed average of workers’ and capitalists’ utilities. The ...

In this paper, we study how foreign ownership of Swedish companies affects employment and wages. To study these effects, we specify a model based on the assumption that the Swedish labour market can be described as one where trade unions and employers bargain over employment and wages. Our hypothesis is that bargaining power is affected by institutional settings and the ownership of the firm. T...