Unions, monopolistic competition and unemployment

Abstract

"This paper develops a general equilibrium dual labour market model which in- corporates union bargaining with monopolistically competitive firms. It is shown that not only the degree of union bargaining power but also the market power firms possess on the product market have a positive influence on unemployment. The reason for this is that less intense product market competition increases the negotiated wage rates as well as the price mark-up firms charge over their mar- ginal costs, both of which reduce labour demand. It is also shown that higher competition intensity will force firms to merge to larger units." (Author's abstract, IAB-Doku) ((en))

Cite article

Wapler, R. (2000): Unions, monopolistic competition and unemployment. (Tübinger Diskussionsbeitrag 180), Tübingen, 23 p.