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Wage and Employment Effects of Workplace Representation – A ""Right To Co-Manage"" Model

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  • Gu, Yiquan

Abstract

This paper introduces a two-stage union-oligopoly-council model of wage and employment determination wherein at the first stage wage is negotiated through collective bargaining and at the second stage employment in each firm is co-determined by the employer and its works council. We provide a full characterization of the model outcome for all parameter values of bargaining power and co-determination power. In particular, works councils always increase employment while their impact on wage can be non-monotonic. Overall, individual works councils' pursuit of own workers' interests may well harm the workers as a union.

Suggested Citation

  • Gu, Yiquan, 2010. "Wage and Employment Effects of Workplace Representation – A ""Right To Co-Manage"" Model," Ruhr Economic Papers 178, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:178
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    References listed on IDEAS

    as
    1. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, June.
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    More about this item

    Keywords

    Workplace representation; union-oligopoly bargaining; firm-council codetermination;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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