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| Author: | Booth, A. L. Chatterji, M. |
| Title: | Unions and efficient training. |
| Journal: | Economic Journal
1998 : MARCH, VOL. 108:447, p. 328-343 |
| Index terms: | TRAINING TRADE UNIONS SOCIAL WELFARE PAY WAGE DETERMINATION |
| Freeterms: | salaries |
| Language: | eng |
| Abstract: | The study investigates the optimal level of training investment when trained workers are mobile, wage contracts are time-consistent, and training comprises both specific and general skills. The firm has ex post monopsonistic power that drives trained workers' wages below the social optimum. The emergence of a trade union bargaining at the firm-level can increase social welfare, by counterbalancing the firm's ex post monopsonistic power in wage determination. Local union-firm wage bargaining ensures that the post-training wage is set sufficiently high to deter at least some quits, so that the numer of workers the firm trains is nearer the social optimum. |
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