Abstract
Collective Bargaining Systems and Macroeconomic and Microeconomic Flexibility: The Quest for Appropriate Institutional Forms in Advanced Economies
Highlights
This paper charts changing views on a labor market institution from the perspective of microeconomic and macroeconomic flexibility
Blanchard and Phillipon (2004) have concluded that this in the case in a multivariate analysis of labor relations and unemployment, 1979-2002. Their basic argument is that in countries where wages are largely determined by collective bargaining, the effect on unemployment of changes in the economic environment will depend in large part on the speed of learning of unions
The evidence suggests that what is needed for efficiency is a collective bargaining system that allows for local adjustment while retaining coordination to facilitate macroeconomic adjustment
Summary
This paper charts changing views on a labor market institution from the perspective of microeconomic and macroeconomic flexibility. Evidence that unionism is associated with wage rigidity constraining labor market reallocation has to be considered in the context of bargaining level as well as alongside the apparent stimulus given to adjustments along other margins. Visser’s (2013, 2016) updated discussion of national collective bargaining institutions provides a comprehensive breakdown of changes in collective bargaining along the dimensions of bargaining coverage, bargaining structure, and bargaining coordination His discussion is summarized in the present treatment and certain key themes uncovered there enlarged upon. It is important to recognize that the present treatment is a partial one It reflects the very real state of flux in the institutions of collective bargaining that awaits formal incorporation into models of the covariation of labor market institutions and macro outcomes. The goal is to establish key associations and the most important trends in a framework that seeks to identify a plurality of fit-for-purpose regimes rather than favoring any single model
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