Arbeitspapier
Bargaining frictions and hours worked
A matching model with labor/leisure choice and bargaining frictions is used to explain (i) differences in GDP per hour and GDP per capita, (ii) differences in employment, (iii) differences in the proportion of part-time work across countries. The model predicts that the higher the level of rigidity in wages and hours the lower are GDP per capita, employment, part-time work and hours worked, but the higher is GDP per hours worked. In addition, it predicts that a country with a high level of rigidity in wages and hours and a high level of income taxation has higher GDP per hour and lower GDP per capita than a country with less rigidity and a lower level of taxation. This is due mostly to a lower level of employment. In contrast, a country with low levels of rigidity in hour and in wage setting but with a higher level of income taxation has a lower GDP per capita and a higher GDP per hour than the economy with low rigidity and low taxation, because while the level of employment is similar in both economies, the share of part-time work is larger.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 1722
- Classification
-
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Time Allocation and Labor Supply
Wages, Compensation, and Labor Costs: General
Labor Contracts
Labor-Management Relations, Trade Unions, and Collective Bargaining: General
Unemployment: Models, Duration, Incidence, and Job Search
- Subject
-
model of search and matching
bargaining frictions
economic performance
labor market institutions
part-time jobs
labor market rigidities
- Event
-
Geistige Schöpfung
- (who)
-
Auray, Stéphane
Danthine, Samuel
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2005
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Auray, Stéphane
- Danthine, Samuel
- Institute for the Study of Labor (IZA)
Time of origin
- 2005
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