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Labor Associations: The Blue Wall of Silence

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  • Levine, David
  • Mattozzi, Andrea
  • Modica, Salvatore

Abstract

We develop a model showing that when labor demand is inelastic and individual behavior is easily monitored a firm’s employees may prefer to protect its shirkers. By optimally reducing overall effort and increasing wages for all, a labor association rationally uses its monopoly power as described in the left wing labor slogan “work less so that all may work.†In addition, employees have a strong incentive to conceal information about peers’ performance from firms, what has been infamously known as the blue wall of silence in the case of the police. We argue that a number of recently proposed remedies to this problem are unlikely to succeed and suggest a more promising alternative: increase competition.

Suggested Citation

  • Levine, David & Mattozzi, Andrea & Modica, Salvatore, 2023. "Labor Associations: The Blue Wall of Silence," CEPR Discussion Papers 18155, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18155
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