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INSIDERS AND OUTSIDERS IN UNION MODELS
Author(s) -
Sanfey Peter J.
Publication year - 1995
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.1467-6419.1995.tb00117.x
Subject(s) - insider , economics , unemployment , wage , rigidity (electromagnetism) , phenomenon , welfare , bargaining power , labour economics , empirical evidence , collective bargaining , microeconomics , macroeconomics , market economy , political science , law , philosophy , physics , structural engineering , epistemology , quantum mechanics , engineering
Abstract. This paper examines the importance of distinguishing between ‘insiders’and ‘outsiders’in models of union‐firm bargaining. In general, insiders are those workers already established in the firm, while outsiders are either unemployed or working in temporary, low‐security jobs. Modifying traditional union models to take account of this distinction is straightforward in one‐period models, where the union is assumed to be indifferent to the welfare of outsiders, but is much more complicated in dynamic models. Some of the predictions of insider‐outsider models concerning wage rigidity and unemployment are not robust. However, the prediction that wages will depend on both insider and outsider forces is robust and appears to be supported by the empirical evidence. Furthermore, evidence from the U.S. suggests that insider power should not be viewed as a purely union phenomenon.