Willman – Employment Relationship
Willman 2016
-Employment relationship
-Neoclassical economics ignores central conflict of interest/power
Simon
Simon 1951
-Economic theory ignores the two most striking thing about the employment contract
-3 Characteristics of employment relationship in reality
-Area of Acceptance – Voluntary assignment of authority
Simon & Williamson
Simon 1951 – Williamson 1975
-6 Features of Employment contracts
Williamson
Williamson 1975
-3 Contract types
Doeringer & Priore
Doeringer & Priore 1971
-Internal Labour Markets (Neoclassical economics vs. insulated)
-9 Characteristics
-ILMs generated by 3 factors not envisiones in conventional economics theory
Hirschman
Hirschman 1970
-Mechanisms for dealing with social or economic problems
-Exit, Voice & Loyalty
-Benefits of voice
Freeman & Medoff
Freeman & Medoff 1984 – What do Unions do
-2 faces of unions
-3 ways increased wages affect productivity
-Voice face can increase productivity (5)
-Evidence
-Optimistic conclusion
Olson
Olson 1971
-Why might it be easy/difficult to form a union?
-Economic costs of collective action (public vs. private goods)
-Central problem: Freeriding
-2 Solutions
Willman
Willman 2014
-Individualisation of the employment relationship
-Unions provide 3 kinds of service
-When is unionization more likely 5 reasons
-Why do managers choose to deal with unions (3)
For employees – the evidence on wages
Freeman & Medoff 1984
-10-15%
-Own US data 20-30%
OECD 2019
-10-15% US/UK
Blanchflower & Bryson 2004
-Exists, but declined (due to increased competition)
-17-21% private, 14% public
OECD
-Union wage premium US/UK 10-15%
-Quality of work environment / forms of voice
Evidence on society
-Di Maggio 2001 – Middle-class formation
-Political stability
-Hall & Soskice 2001 – Innovation pressure
Hirsch
Hirsch 2004 – What do unions do for economic performance
-Response to Freeman & Medoff 1984
-Wage premium -> Any compensating positives?
-Are the two faces really distinct
-3 Reasons why it’s difficult to measure
-Putting Freeman & medoff 1984 into context
Wessels
Wessels 1994
-Upskilling of labour in union firms
-> Unions could then demand higher wages -> Employer might anticipate and not upgrade workforce
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