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Centralized Bargaining, Multi-Tasking and Work Incentives

Author

Listed:
  • Lindbeck, Assar

    (Stockholm University)

  • Snower, Dennis J.

    (Hertie School of Governance)

Abstract

The paper examines the implications for wage bargaining of an important aspect of the ongoing reorganization of work - the move from occupational specialization toward multi-tasking. The analysis shows how, on account of such reorganization, centralized bargaining becomes increasingly inefficient and detrimental to firms’ profit opportunities, since it prevents firms from offering their employees adequate incentives to perform the appropriate mix of tasks. The paper also shows how centralized bargaining inhibits firms from using wages to induce workers to learn how to use their experience from one set of tasks to enhance their performance at other tasks. In this way, the paper may also help explain the increasing resistance to centralized bargaining in various advanced market economies.

Suggested Citation

  • Lindbeck, Assar & Snower, Dennis J., 1999. "Centralized Bargaining, Multi-Tasking and Work Incentives," IZA Discussion Papers 56, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp56
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    Citations

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    Cited by:

    1. Floro Ernesto Caroleo, 2000. "Le politiche per l'occupazione in Europa: una tassonomia istituzionale," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2000(71).
    2. Snower, Dennis J., 1999. "Inequality of Earnings," CEPR Discussion Papers 2321, C.E.P.R. Discussion Papers.
    3. Siebert, Horst, 1997. "Disziplinierung der nationalen Wirtschaftspolitik: durch die internationale Kapitalmobilität," Kiel Working Papers 832, Kiel Institute for the World Economy (IfW Kiel).
    4. Lindbeck, Assar & Snower, Dennis J, 2000. "Multitask Learning and the Reorganization of Work: From Tayloristic to Holistic Organization," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 353-376, July.
    5. Dennis J. Snower, 1998. "Causes of changing earnings inequality," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 69-133.
    6. Franz Traxler, 2003. "Bargaining (De)centralization, Macroeconomic Performance and Control over the Employment Relationship," British Journal of Industrial Relations, London School of Economics, vol. 41(1), pages 1-27, March.
    7. Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series 871, CESifo.
    8. Ansgar Belke & Bernhard Herz & Lukas Vogel, 2007. "Reforms, Exchange Rates and Monetary Commitment: A Panel Analysis for OECD Countries," Open Economies Review, Springer, vol. 18(3), pages 369-388, July.
    9. Ansgar Belke & Bernhard Herz & Lukas Vogel, 2006. "Beyond Trade – Is Reform Effort Affected by the Exchange Rate Regime? A Panel Analysis for the World versus OECD Countries," Economie Internationale, CEPII research center, issue 107, pages 29-58.
    10. Lindbeck, Assar, 2001. "Changing Tides For The Welfare State," Seminar Papers 694, Stockholm University, Institute for International Economic Studies.
    11. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.

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    More about this item

    Keywords

    information flows; wage formation; restructuring of firms; centralized wage bargaining; employment;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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