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A Model of Wage Bargaining

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  • Rowlatt, Penelope A

Abstract

An equation for earnings is derived from the assumption that wage increases are determined in a process of negotiation bet ween union and firm. The union is taken to be concerned about real wa ge, the firm about its real profit. The goods market is perfectly com petitive. The empirical work supported the hypothesis. The data sugge sted that employees' concerns have more influence on the outcome than employers'. The levels of profits and the real wage both played a ro le in explaining wage increases. The change in unemployment was found relevant to the outcome as well as the level. Copyright 1987 by Blackwell Publishing Ltd

Suggested Citation

  • Rowlatt, Penelope A, 1987. "A Model of Wage Bargaining," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 347-372, November.
    • Handle: RePEc:bla:obuest:v:49:y:1987:i:4:p:347-72
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    Cited by:

    1. Blanchflower, D. & Oswald, A. & Garrett, M., 1988. "Insider Power In Wage Determination," Papers 319, London School of Economics - Centre for Labour Economics.
    2. Roger Bjørnstad & Ragnar Nymoen, 1999. "Wage and Profitability: Norwegian Manufacturing 1967-1998," Discussion Papers 259, Statistics Norway, Research Department.
    3. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, April.
    4. Timo Tyrväinen, 1989. "A guide to the Finnish labour market," Finnish Economic Papers, Finnish Economic Association, vol. 2(2), pages 160-175, Autumn.

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