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Unions and Efficient Training

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Author Info
Booth, Alison L
Chatterji, Monojit

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Abstract

This paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. The firm has ex post monopsonistic power that drives trained workers' wages below the social optimum. The emergence of a trade union bargaining at the firm-level can increase social welfare by counterbalancing the firm's ex post monopsonistic power in wage determination. Local union-firm wage bargaining ensures that the posttraining wage is set sufficiently high to deter at least some quits, so that the number of workers the firm trains is nearer the social optimum.

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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 108 (1998)
Issue (Month): 447 (March)
Pages: 328-43
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Handle: RePEc:ecj:econjl:v:108:y:1998:i:447:p:328-43

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  1. David Green & Thomas Lemieux, 2007. "The impact of unionization on the incidence of and sources of payment for training in Canada," Empirical Economics, Springer, vol. 32(2), pages 465-489, May. [Downloadable!] (restricted)
  2. Tatyana Chesnokova & Kala Krishna, 2006. "Skill Acquisition, Credit Constraints, and Trade," NBER Working Papers 12411, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Booth, Alison L & Francesconi, Marco & Zoega, Gylfi, 1999. "Training, Rent-Sharing and Unions," CEPR Discussion Papers 2200, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Lisa M. Lynch, 2004. "Development Intermediaries and the Training of Low-Wage Workers," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 293-314 National Bureau of Economic Research, Inc. [Downloadable!]
  5. Moen, Espen R. & Rosén, Åsa, 2002. "Does poaching distort training?," Working Paper Series 4/2002, Swedish Institute for Social Research. [Downloadable!]
    Other versions:
  6. James Malcomson & James W. Maw & Barry McCormick, 2002. "General Training by Firms, Apprentice Contracts, and Public Policy," Economics Series Working Papers 086, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  7. Dustmann; Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Blunch, Niels-Hugo & Verner, Dorte, 2001. "Asymmetries in union relative wage effects in Ghanaian manufacturing - an analysis applying quantile regressions," Policy Research Working Paper Series 2570, The World Bank. [Downloadable!]
  9. Alexandre Léné, 2002. "Enterprise-related training and poaching externalities," Post-Print halshs-00150509_v1, HAL. [Downloadable!]
  10. Monastiriotis, Vassilis, 1999. "Is declining union density increasing regional inequalities? Trade Unions, regional economic performance and regional disparities in the UK," ERSA conference papers ersa99pa182, European Regional Science Association. [Downloadable!]
  11. Vassilis Monastiriotis, 2003. "Union Retreat and Regional Economic Performance: the UK in the 1990s," Urban/Regional 0302006, EconWPA. [Downloadable!]
  12. Donado, Alejandro & Wälde, Klaus, 2009. "Trade unions go global!," IAB Discussion Paper 200903, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  13. Ericson, Thomas, 2004. "Personnel training: a theoretical and empirical review," Working Paper Series 2005:1, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  14. Decreuse, Bruno & Granier, Pierre, 2007. "Matching frictions and the divide of schooling investment between general and specific skills," MPRA Paper 6948, University Library of Munich, Germany. [Downloadable!]
  15. Alison Booth & Pamela Katic, 2008. "Men at Work in a Land Down-under," CEPR Discussion Papers 586, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  16. Booth, Alison L. & Francesconi, Marco & Zoega, Gylfi, 2003. "Unions, Work-Related Training, and Wages: Evidence for British Men," IZA Discussion Papers 737, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  17. Blunch, Niels-Hugo & Verner, Dorthe, 2001. "Assymetries in Union Relative Wage Effects in Ghanian Manufacturing - An analysis Applying Quantile Regressions," CLS Working Papers 01-7, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research. [Downloadable!]
  18. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO. [Downloadable!]
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