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Bargaining, Compensating Wage Differentials, and Dualism of the Labor Market: Theory and Evidence for France

Abstract : The theory of compensating differentials predicts a negative relationship between wages and good working conditions, while the theory of segmentation predicts a positive one. Combining the hedonic wage model and the wages‐employment collective bargaining model, we show the relevance of a further factor: a union power effect. Then we test the validity of this effect with French cross‐section data. Empirical results confirm the predictions of the model, that is, the coexistence of a negative relationship between wages and good working conditions for the whole sample (market effect) and a positive relationship in highly unionized sectors (union power effect).
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https://halshs.archives-ouvertes.fr/halshs-00367153
Contributor : Catherine Sofer <>
Submitted on : Tuesday, March 10, 2009 - 2:54:51 PM
Last modification on : Tuesday, February 19, 2019 - 1:14:02 PM

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Christophe Daniel, Catherine Sofer. Bargaining, Compensating Wage Differentials, and Dualism of the Labor Market: Theory and Evidence for France. Journal of Labor Economics, University of Chicago Press, 1998, 16 (3), pp.546-575. ⟨10.1086/209898⟩. ⟨halshs-00367153⟩

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