Training and Product Quality in Unionized Oligopolies

Bacchiega, Emanuele ; Minniti, Antonio (2013) Training and Product Quality in Unionized Oligopolies. Bologna: Dipartimento di Scienze economiche - DSE, p. 16. DOI 10.6092/unibo/amsacta/3704. In: Quaderni - Working Paper DSE (871). ISSN 2282-6483.
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Abstract

In this paper we analyze the private and public incentives towards skill acquisition when the skill level of workers determines the quality level of goods, and both labor and product markets are non competitive. We delve into the mechanisms that determine the equilibrium skill acquisition outcomes and show that both "pure" (training set by either firms or unions only) and "mixed" (training set by firms and unions) training scenarios may emerge at equilibrium. We show that firms have generally greater training incentives than unions, resulting in a higher product quality. In line with empirical evidence, we also find that the wage differential between high-skill workers and low-skill workers is lower when the training levels of the workforce are selected by unions than by firms. Finally, we analyze the optimal public training skill levels and demonstrate that both unions and firms under-invest in training in comparison with the social optimum. Yet, in this case the skill premium is the lowest.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bacchiega, Emanuele
Minniti, Antonio
Keywords
Workers' Skills, Product Quality, Unionized Oligopoly, Training
Subjects
ISSN
2282-6483
DOI
Deposit date
19 Jun 2013 10:11
Last modified
03 Oct 2013 08:02
URI

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