Union wage compression in a Right-to-Manage model

Arbeitspapier

Trade unions are consistently found to compress the wage distribution. Moreover, unemployment affects in particular low-skilled workers. The present paper argues that an extended Right-to-Manage model can account for both of these findings. In this model unions compress the wage distribution by raising wages of workers in low productivity industries (or low-skilled workers) above market clearing levels. Our analysis suggests that the most direct way to test this model would be via a test for stochastic dominance. We also allow for capital adjustments and compare union and non-union wage distributions in a general equilibrium framework.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2007,009

Classification and Topics

• Classification: Wirtschaft ; Trade Unions: Objectives, Structure, and Effects ; Wage Level and Structure; Wage Differentials ; Labor Contracts ; Labor Force and Employment, Size, and Structure
• Subject: Trade unions ; wage compression ; Lohnpolitik ; Lohnstruktur ; Ungelernte Arbeitskräfte ; Gewerkschaftlicher Organisationsgrad ; Arbeitslosigkeit ; Lohnverhandlungstheorie ; Theorie ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vogel, Thorsten
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25181
• Last update: 10.03.2025, 11:43 AM CET