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Public sector wage settlement and the threat of outsourcing

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  • Gervan Fearon

Abstract

This paper investigates the impact of outsourcing on wage settlement in the public sector. The study characterizes the equilibrium wage offered by the public sector union to a government bureau competing against private sector firms. It is predicted that the union will offer a concession wage in an attempt to block outsourcing when its members' outside employment options are sufficiently unattractive and will offer a non-concession wage otherwise. The study contributes to the literature on outsourcing and wage determination in the public sector. Copyright International Atlantic Economic Society 2004

Suggested Citation

  • Gervan Fearon, 2004. "Public sector wage settlement and the threat of outsourcing," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(3), pages 161-174, September.
    • Handle: RePEc:kap:atlecj:v:32:y:2004:i:3:p:161-174
    DOI: 10.1007/BF02299435
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    Cited by:

    1. Andreas Wörgötter & Sihle Nomdebevana, 2020. "Aggregate Public-Private Remuneration Patterns in South Africa," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 461-474, December.

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