Efficiency wages, unemployment benefits and union-firm wage bargaining: the issue of the choice of the outside option
(2011) JOURNAL OF LABOR RESEARCH. 32(1). p.75-86- abstract
- This paper points out that there may be a logical consistency issue in choosing the reference wage in efficiency wage models. We have shown that defining the outside option in the efficiency wage logic as the market-clearing wage solves this difficulty, and is justifiable in terms of the assumed behaviour of workers and employers. The model that we examine confirms earlier findings of reinforcing effects between union-firm bargaining and efficiency wages. However, if union preferences vary between wages and employment, Summers' reinforcing effect is no longer present for each value of the parameter describing these preferences. Above a certain threshold value of union preferences for employment, the two mechanisms do not reinforce each other anymore.
Please use this url to cite or link to this publication:
http://hdl.handle.net/1854/LU-1999870
- author
- Wim Meeusen, Vesna Stavrevska and Glenn Rayp UGent
- organization
- year
- 2011
- type
- journalArticle (original)
- publication status
- published
- subject
- keyword
- Efficiency wages, MODEL, Wage bargaining, Unemployment benefits, outside option
- journal title
- JOURNAL OF LABOR RESEARCH
- J. Labor Res.
- volume
- 32
- issue
- 1
- pages
- 75 - 86
- Web of Science type
- Article
- Web of Science id
- 000287860400005
- JCR category
- INDUSTRIAL RELATIONS & LABOR
- JCR impact factor
- 0.205 (2011)
- JCR rank
- 23/24 (2011)
- JCR quartile
- 4 (2011)
- ISSN
- 0195-3613
- DOI
- 10.1007/s12122-011-9103-z
- language
- English
- UGent publication?
- yes
- classification
- A1
- copyright statement
- I have transferred the copyright for this publication to the publisher
- id
- 1999870
- handle
- http://hdl.handle.net/1854/LU-1999870
- date created
- 2012-01-23 12:47:39
- date last changed
- 2012-01-25 09:39:10
@article{1999870,
abstract = {This paper points out that there may be a logical consistency issue in choosing the reference wage in efficiency wage models. We have shown that defining the outside option in the efficiency wage logic as the market-clearing wage solves this difficulty, and is justifiable in terms of the assumed behaviour of workers and employers. The model that we examine confirms earlier findings of reinforcing effects between union-firm bargaining and efficiency wages. However, if union preferences vary between wages and employment, Summers' reinforcing effect is no longer present for each value of the parameter describing these preferences. Above a certain threshold value of union preferences for employment, the two mechanisms do not reinforce each other anymore.},
author = {Meeusen, Wim and Stavrevska, Vesna and Rayp, Glenn},
issn = {0195-3613},
journal = {JOURNAL OF LABOR RESEARCH},
keyword = {Efficiency wages,MODEL,Wage bargaining,Unemployment benefits,outside option},
language = {eng},
number = {1},
pages = {75--86},
title = {Efficiency wages, unemployment benefits and union-firm wage bargaining: the issue of the choice of the outside option},
url = {http://dx.doi.org/10.1007/s12122-011-9103-z},
volume = {32},
year = {2011},
}
- Chicago
- Meeusen, Wim, Vesna Stavrevska, and Glenn Rayp. 2011. “Efficiency Wages, Unemployment Benefits and Union-firm Wage Bargaining: The Issue of the Choice of the Outside Option.” Journal of Labor Research 32 (1): 75–86.
- APA
- Meeusen, W., Stavrevska, V., & Rayp, G. (2011). Efficiency wages, unemployment benefits and union-firm wage bargaining: the issue of the choice of the outside option. JOURNAL OF LABOR RESEARCH, 32(1), 75–86.
- Vancouver
- 1.Meeusen W, Stavrevska V, Rayp G. Efficiency wages, unemployment benefits and union-firm wage bargaining: the issue of the choice of the outside option. JOURNAL OF LABOR RESEARCH. 2011;32(1):75–86.
- MLA
- Meeusen, Wim, Vesna Stavrevska, and Glenn Rayp. “Efficiency Wages, Unemployment Benefits and Union-firm Wage Bargaining: The Issue of the Choice of the Outside Option.” JOURNAL OF LABOR RESEARCH 32.1 (2011): 75–86. Print.