Insider Power and Average Labor Demand When Recessions Are Prolonged

  1. Díaz-Vázquez, Pilar 1
  1. 1 Departamento de Fundamentos del Análisis Económico, Facultad de Ciencias Económicas y Empresariales, Universidad de Santiago de Compostela, Avenida do Burgo S/N, A Coruña 15784 Santiago de Compostela, Spain
Journal:
Economics Research International

ISSN: 2090-2123,  2090-2131

Year of publication: 2013

Volume: 2013

Pages: 1-6

Type: Article

DOI: 10.1155/2013/653731 GOOGLE SCHOLAR

More publications in: Economics Research International

Abstract

This paper examines how insider power in wage negotiations affects average labor demand when recessions are more persistent than booms. It shows that the effect of insider power on average labor demand is more contractionary the greater is the persistence of troughs relative to booms. This analysis is a contribution to the discussion of why the existence of dual labor markets (in which insider power is strong) is negative for employment in the current situation of more prolonged troughs.

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