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Hohenheim discussion papers in business, economics and social sciences

Permanent URI for this collectionhttps://hohpublica.uni-hohenheim.de/handle/123456789/15826

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Browsing Hohenheim discussion papers in business, economics and social sciences by Person "Baudy, Philipp"

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    Deregulation of temporary agency employment in a unionized economy : does this really lead to a substitution of regular employment
    (2016) Baudy, Philipp; Cords, Dario
    There have been continuous deregulation efforts concerning temporary agency employment in almost all European countries aiming at an increasing exibility in the European labor markets. This paper theoretically investigates the effects of a legal deregulation of temporary agency employment on wage setting and the employment structure in a unionized economy with labor market frictions. Multiple-worker firms bargain simultaneously with temporary agencies and labor unions to determine the respective labor costs. It is shown that there is a hump-shaped relationship between the degree of legal deregulation of temporary agency employment and the rate of temporary employment used in the production process. Temporary agency employment may even decrease despite its deregulation. Furthermore, regular employment monotonically increases, while individual workers and labor unions suffer from deregulation due to declining wages and a reduction in labor unions utility.
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    The impact of temporary agency work on trade union wage setting : a theoretical analysis
    (2015) Baudy, Philipp; Beißinger, Thomas
    Focusing on the cost-reducing motive behind the use of temporary agency employment, this paper aims at providing a better theoretical understanding of the effects of temporary agency work on the wage-setting process, trade unions’ rents, firms’ profits and employment. It is shown that trade unions may find it optimal to accept lower wages to prevent firms from using temporary agency workers. Hence, the firms’ option to use agency workers may affect wage setting also in those firms that only employ regular workers. However, if firms decide to employ agency workers, trade union wage claims will increase for the (remaining) regular workers. An intensive use of temporary agency workers in high-wage firms may therefore be the cause and not the consequence of the high wage level in those firms. Even though we assume monopoly unions that ascribe the highest possible wage-setting power to the unions, the economic rents of trade unions decline because of the firms’ option to use temporary agency work, whereas firms’ profits may increase.