Imperfect goods and labor markets, and the union wage gap

  • Existing theoretical literature fails to explain satisfactorily the differences between the pay of workers that are covered by collective agreements and others who are not. This study aims at providing a model framework which is amenable for an analysis of this issue. Our general-equilibrium approach integrates a dual labor market and a two-sector product market. The results suggest that the so-called 'union wage gap' is largely determined by the degree of centralization of the bargains, and, to a somewhat lesser extent, by the expenditure share of the unionized sector's goods.

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Author:Helge Sanner
Document Type:Postprint
Year of Completion:2005
Publishing Institution:Universit├Ąt Potsdam
Release Date:2006/02/16
Tag:comparative analysis; dual labor market; monopolistic competition; union wage premium; wage differentials
GND Keyword:Gewerkschaften; Monopolistische Konkurrenz; Verhandlungstheorie
Source:Journal of Population Economics. - ISSN 1432-1475. - Online First (2006), S. 1 - 18
RVK - Regensburg Classification:QC 220
RVK - Regensburg Classification:QC 340
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakult├Ąt / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Notes extern:The original publication is available at
DOI: 10.1007/s00148-005-0010-6