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Is Competition or Collusion in the Product Market Relevant for Labour Markets?*

Published online by Cambridge University Press:  17 August 2016

Fabian Bergès  and
Stéphane Caprice
Fabian Bergès
Affiliation:
Toulouse School of Economics (GREMAQ, INRA, IDEI); UMR 1291,21 Allée de Brienne, F-31000 Toulouse.
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Summary

In non-union models, there is an ambiguous relationship between collusion on the product market and the resulting impact on the labour market. We can derive some conclusions by assuming a dual labour market with qualified and unqualified workers and taking into account the efficiency effect when employing qualified workers. The framework adopted here consists of two firms competing to hire workers on the qualified labour market, and then competing (or colluding) on the product market to sell their production. While qualified workers are heterogeneous in their specialization, firms sell imperfect substitute goods on the product market.

First, if the two firms collude in setting prices on the product market, this leads to an increase in the symmetric equilibrium wage in the qualified labour market, as well as a rise in productivity. Unions are not considered. Second, although the number of unqualified workers hired decreases along with the total employment, the wage bill can rise because of intensified competition on the qualified labour market.

Résumé

Résumé

Dans des modèles où les syndicats ne sont pas présents, le lien entre la collusion sur le marché des biens et son impact sur le marché du travail est ambigu. Considérer un marché dual du travail où se côtoient des ouvriers qualifiés et non qualifiés, en tenant compte de l'accroissement d'efficacité due à la présence d'ouvriers qualifiés dans la firme, permet d'éclairer ce lien et de tirer quelques conclusions. Le cadre d'analyse est composé de deux firmes qui sont en concurrence sur le marché du travail pour le recrutement d'employés, et qui sont en concurrence (ou en collusion) sur le marché des biens pour vendre leur production. Les employés qualifiés sont hétérogènes dans leur spécialisation. Les biens vendus sur le marché final sont imparfaitement substituables. Un premier résultat est que la collusion sur le marché des biens aboutit à un salaire d'équilibre symétrique plus élevé sur le marché du travail (en l'absence de syndicats). Deuxièmement, la collusion favorise le recrutement d'employés qualifiés : les firmes sont incitées à recruter des ouvriers qualifiés pour accroître leur productivité et bénéficier d'économies sur les coûts. Enfin, la collusion sur le marché des biens se fait aux dépens des travailleurs non qualifiés et de l'emploi total ; elle peut cependant augmenter la masse salariale.

Keywords

Emploipartage de la renteoligopole et collusionJ21J31L13Q13Rent-sharingemploymentoligopolycollusionJ21J31L13Q13
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 74 , Issue 3 , 2008 , pp. 273 - 298
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2008 

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Footnotes

*

We are grateful for remarks from EARIE (2003), Labour Seminar at the University of Warwick, Applied Economics Seminar at Inra-Toulouse (2003) and EALE (2004) participants. This article was finalized while Stephane Caprice was a visiting fellow at the Warwick University during the year 2004-2005.

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