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Union bargaining power, relative wages, and efficiency in Canada

Union bargaining power, relative wages, and efficiency in Canada We use a computable general equilibrium model incorporating trade unions, efficient Nash contracts, existing distortions, and international trade to measure the deadweight loss in Canada arising from the ability of unions to raise wages above competitive levels. The model incorporates two features new to CGE analysis: parameterization of union bargaining power and variations in union preferences. Estimates indicate the deadweight loss to be no more than 0.04 per cent of GNP. However, the small aggregate effect masks considerable adjustments at the industry level, in imports and exports, and in the distribution of income. Adjustments are also larger with employment‐oriented unions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Canadian Journal of Economics/Revue Canadienne D'économique Wiley

Union bargaining power, relative wages, and efficiency in Canada

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References (1)

Publisher
Wiley
Copyright
Copyright © 2000 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0008-4085
eISSN
1540-5982
DOI
10.1111/0008-4085.00039
Publisher site
See Article on Publisher Site

Abstract

We use a computable general equilibrium model incorporating trade unions, efficient Nash contracts, existing distortions, and international trade to measure the deadweight loss in Canada arising from the ability of unions to raise wages above competitive levels. The model incorporates two features new to CGE analysis: parameterization of union bargaining power and variations in union preferences. Estimates indicate the deadweight loss to be no more than 0.04 per cent of GNP. However, the small aggregate effect masks considerable adjustments at the industry level, in imports and exports, and in the distribution of income. Adjustments are also larger with employment‐oriented unions.

Journal

Canadian Journal of Economics/Revue Canadienne D'économique – Wiley

Published: Aug 1, 2000

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