Comment on J. Pencavel, “ Wages and Employment under Trade Unionism: Microeconomic Models and Macroeconomic Applications”

Abstract

I enjoyed John Pencavel’s paper. It is interesting and well written, and it provides a useful survey of some of the new work on unionized labour markets. My feeling is that we need more econometric studies of the general form examined here, although it must be said—as the author himself does—that the empirical results in this paper are unsatisfactory. My own knowledge of the Swedish economy is not good enough to allow me to make confident suggestions about those variables missing from the empirical analysis. One or two points of a broader nature do occur to me, however, and I tackle them later. First, following the author’s own approach, it might be best to begin by considering the theoretical issues.KeywordsTrade UnionLabor DemandExcess DemandUnion WageContractual WageThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.