Abstract
Recent research has attempted to explain the impact of changes in union bargaining of] the UK productivity miracle of the 1980s. A central part of these explaniations is the concept of 'effort' or 'working conditions' as an observable component of negotiations. After reviewing the evidence, this paper shiows that, in models where effort and wages are jointly negotiated in an environmenit of weakenitig union power, a positive effort-wage association-as observed in the early 1980s in the UK-emerges only unider quite special assumptions. We show that the stylized facts are better explained by a model where effort and wages are bargained over sequentially.
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