Description:

Speaker: Sebastian Poblete Coddou

Title: Union Bargaining Schemes in The Presence of Labor Market Power

Abstract: There is increasing concern for the exercise of monopsony power in different industries and countries. In this project, I study the role of union bargaining schemes in potentially counteracting wage markdowns using data on firms, unions, and collective agreements on the Chilean tradable sector. I study the mentioned issue through a bargaining model that nests the case of a full monopsony in a local labor market, and where bargaining power of the union relative to the firm can both counteract market power but also potentially worsen the position of the workers in terms of employment. Moreover, the model also allows for multiunit bargaining, allowing unions to bargain with several firms simultaneously, generating externalities in the local labor market where unions bargain. I plan to use this model to separately quantify the components of wages explained by marginal productivity, monopsony power of the firm, bargaining power of the union and the externality generated in the case of multiunit bargaining. Second, I also plan to use the model to study the role of counterfactual bargaining schemes and policies, in particular comparing single firm and union bargaining with unions representing a number of workers across firms, and minimum wage policies. The counterfactual analysis should allow for wage, employment, and welfare effects on workers of the different policies.