Steady State Unemployment Under Profit Sharing

Steady State Unemployment Under Profit Sharing

Equilibrium unemployment under negotiated profit sharing

We study employment, employee effort, wages and profit sharing when firms face stochastic revenue shocks and when base wages and profit shares are determined through collective bargaining. The negotiated profit share depends positively on the relative bargaining power of the trade union and has effort-enhancing and wage-moderating effects. We show that higher profit sharing reduces equilibrium ...

Strategic Outsourcing , Profit Sharing and Equilibrium Unemployment

We analyze the following questions under imperfect labour markets. How does strategic outsourcing influence wage formation, profit sharing and employee effort when firms commit to optimal profit sharing before wage formation or decide for profit sharing after wage formation? What is the relationship between outsourcing, profit sharing, and equilibrium unemployment? We find that in both scenario...

Profit Sharing, Credit Market Imperfections and Equilibrium Unemployment

We investigate the interaction between labour and credit market imperfections for equ ilibrium unemployment in the presence of profit sharing. Our analysis highlights the critical role of the outside option available of employees for the evaluation of the employment implications of intensified credit market competition. In a partial equilibrium with exogenous outside options increased bargainin...

Erkki Koskela * - Rune Stenbacka * * PROFIT SHARING , CREDIT MARKET IMPERFECTIONS AND EQUILIBRIUM UNEMPLOYMENT

We investigate the interaction between labour and credit market imperfections for equilibrium unemployment in the presence of profit sharing. Our analysis highlights the critical role of the outside option available of employees for the evaluation of the employment implications of intensified credit market competition. In a partial equilibrium with exogenous outside options increased bargaining...