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Is Unemployment Lower if Unions Bargain Over Employment?

In: Advances in the Theory and Measurement of Unemployment

Author

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  • Richard Layard
  • Stephen Nickell

Abstract

Would there be more employment if unions bargained over employment, and not only over wages? Most economists seem to answer Yes:1 Proposition 1 If unions bargain over employment and wages, employment will be higher than if they bargain only over wages. Most economists also believe the following: Proposition 2 If unions bargain over employment and wages and are utilitarian and risk-averse, then ‘equilibrium employment is higher than in the equivalent competitive labour market’ (Oswald. 1985). So, in the eyes of many, bargaining over employment is a good thing.

Suggested Citation

  • Richard Layard & Stephen Nickell, 1990. "Is Unemployment Lower if Unions Bargain Over Employment?," Palgrave Macmillan Books, in: Yoram Weiss & Gideon Fishelson (ed.), Advances in the Theory and Measurement of Unemployment, chapter 11, pages 304-322, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-10688-2_11
    DOI: 10.1007/978-1-349-10688-2_11
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