English, Article, Journal or magazine article edition: A Union-Oligopoly Model of Endogenous Discrimination:Should it be wage discrimination taxed or discriminated employment subsidized? Minas Vlassis; Nick Drydakis

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Bookmark: http://trove.nla.gov.au/version/76851
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • A Union-Oligopoly Model of Endogenous Discrimination:Should it be wage discrimination taxed or discriminated employment subsidized?
Author
  • Minas Vlassis
  • Nick Drydakis
Physical Description
  • preprint
Notes
  • In the context of a homogenous good industry with Cournot rivalry and technological asymmetries among firms, equally skilled workers can be grouped according to their different reservation wages. Under decentralized firm-union bargaining, we show that unions may offer to firms the option to discriminate wages across such groups of employees and, by that, to achieve cost sub-additivity in the equilibrium. We subsequently propose that to combat the emerging wage discrimination a benevolent policy maker may activate either taxation, or subsidization, policy. Interestingly, while the former policy always entails a welfare loss, a welfare gain may emerge under the latter policy, relative to the no policy-wage discrimination status quo. Thus our findings suggest that the E.U- antidiscrimination directives may prove to be effective on both egalitarian and efficiency grounds.
  • Unions, Oligopoly, Discriminatory Wage Contracts, Antidiscrimination Policy
  • RePEc:crt:wpaper:0614
Language
  • English
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