Civil Society and the State: The Interplay between Cooperation and Minimum Wage Regulation

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Civil Society and the State: The Interplay between Cooperation and Minimum Wage Regulation

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dc.contributor.author Cahuc, Pierre
dc.contributor.author Algan, Yann
dc.contributor.author Aghion, Philippe
dc.date.accessioned 2009-08-27T16:55:20Z
dc.date.issued 2009
dc.identifier.citation Aghion, Philippe, Yann Algan, and Pierre Cahuc. 2009. Civil Society and the State: The Interplay between Cooperation and Minimum Wage Regulation. Mimeo, Harvard. en
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:3226957
dc.description.abstract In a cross-section of countries, state regulation of labor markets is strongly negatively correlated with the quality of labor relations. In this paper, we argue that these facts reflect different ways to regulate labor markets, either through the state or through the civil society, depending on the degree of cooperation in the economy. We rationalize these facts with a model of learning of the quality of labor relations. Distrustful labor relations lead to low unionization and high demand for direct state regulation of wages. In turn, state regulation crowds out the possibility for workers to experiment negotiation and learn about the potential cooperative nature of labor relations. This crowding out effect can give rise to multiple equilibria: a “good” equilibrium characterized by cooperative labor relations and high union density, leading to low state regulation; and a “bad” equilibrium, characterized by distrustful labor relations, low union density and strong state regulation of the minimum wage. en
dc.description.sponsorship Economics en
dc.language.iso en_US en
dc.relation.isversionof http://www.economics.harvard.edu/faculty/aghion/papers_aghion en
dash.license LAA
dc.subject minimum wage en
dc.subject trade unions en
dc.subject quality of labor relations en
dc.title Civil Society and the State: The Interplay between Cooperation and Minimum Wage Regulation en
dc.type Research Paper or Report
dc.description.version Author's Original
dc.relation.journal Mimeo, Harvard en
dash.depositing.author Aghion, Philippe

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  • FAS Scholarly Articles [7450]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University

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