Abstract
Purpose: The purpose of this paper is to analyse the labor market outcome when there are two unions in the industry, representing heterogeneous workers: substitutes or complements in production: and using wage strategies, in the presence of minimum wage regulation. Design/methodology/approach: Three strategic environments are considered: symmetric Bertrand: Nash duopoly, Stackelberg duopoly, and efficient cooperation between the two unions. Findings: Usually, minimum wage legislation (floor) would decrease employment; it is shown that in Stackelberg environment, minimum wage legislation may induce an increase in total employment. Wage-pushing strategies by a leader may also arise; and if workers are substitutes, entry deterrence strategies by the leader may be observed. Originality/value: This paper analyses the impact of minimum wages in duopoly scenarios in an extensive way.
Original language | English |
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Pages (from-to) | 580-607 |
Number of pages | 28 |
Journal | International Journal of Social Economics |
Volume | 36 |
Issue number | 5 |
DOIs | |
Publication status | Published - 10 Apr 2009 |
Keywords
- Industrial relations
- Labour market
- Pay bargaining
- Pay policies
- Trade unions