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Unions and Efficient Training

Booth, Alison L and Chatterji, Monojit (1998) 'Unions and Efficient Training.' Economic Journal, 108 (447). pp. 328-43. ISSN 0013-0133

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This paper examines the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. The firm has ex post monopsonistic power that drives trained workers' wages below the social optimum. The emergence of a trade union bargaining at the firm-level can increase social welfare by counterbalancing the firm's ex post monopsonistic power in wage determination. Local union-firm wage bargaining ensures that the posttraining wage is set sufficiently high to deter at least some quits, so that the number of workers the firm trains is nearer the social optimum.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 18 Jul 2012 10:47
Last Modified: 18 Jul 2012 10:47

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