Real Wage Determinatioan in Collective BArgaining Agreements
Louis N. Christofides
Andrew J. Oswald
This paper studies the determinants of real wage rates using data on
Canadian labour contracts signed between 1978 and 1984. Its results are
consistent with Dunlop's neglected (1944) hypothesis that real pay movements
are shaped by product price changes (contrary to the predictions of implicit
contract theory and other models of wage inflexibility). The level of the
unemployment rate is found to lower the real wage level with an
elasticity between -0.04 and -0.13, whereas a Phillips Curve specification
which relates wage changes to the level of the unemployment rate is not
convincingly supported by the data. These results may be seen as consistent
with the view that collective bargaining is a form of rent-sharing in which
external unemployment weakens workers' bargaining strength.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.