B44: The Economics of Industrial Relations

Jaap Abbring , Department of Economics, University College London, Autumn 2002

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Course material

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Detailed reading list

I will develop a reading guide as we go (note that handouts will be posted in the course material section ). The most important required reading are the listed parts of Booth (1995) and Milgrom and Roberts (1992). Some background reading in a more elementary labor economics text book like Borjas (2000) may be necessary, or at least helpful. 

I abbreviate references from the syllabus as follows: B: Booth (1995) , BOR: Borjas (2000), BDS: Bosworth, Dawkins and Stromback (1996), CWOD: Cully, Woodland, O'Reilly and Dix (1999), LNJ: Layard, Nickell and Jackman (1991) , MBF: Millward, Bryson and Forth (2000), MR: Milgrom and Roberts (1992). Numbers following the abbreviations refer to chapters, sections, etcetera. Links to papers typically only work from campus (IP-controlled service).  

1. Introduction

  • Your favourite textbook (e.g. BOR or BDS): Review of standard neoclassical model
  • B 1: Introduction to unions
  • First part of MR 10: Some background on labour contracts and human resources systems

2. Trade unions

(a) Overview and history

  • B 2: Historical overview of UK and US unionism.
  • CWOD 5 and 10 (from p. 234) and BOR 11: Recent data on resp. UK and US.
  • LNJ: Broader international comparison
  • (b) Wage setting, employment and allocative efficiency

    (c) Empirical analysis of wage and employment effects of unions

    • B 6

    (d) Union membership, source of monopoly power, insider-outsider theory, strikes

    • You should have encountered the relevant bits and pieces in the B 1-6. In particular, make sure to read B 3.4 on monopoly power and B 5.6 on strikes.

    3. Human-resource systems

    • MR 10-13
    • MR 8 (in particular, pp. 250 and further in my copy) comes closest to my discussion of efficiency wages.
    • BOR 12 (incentives) and 7.9 (training); BDS 18-22 and 16.4 (training)
    • Polachek and Siebert (1993), 9 and 4.4 (training), and Lazear (1996)
    • B 3.3 and 7: unions and organisation (also: Freeman and Medoff, 1984)
    • CWOD for extensive data on the UK

    The MR and B references are the most important. We will first discuss employment relations and elements of human resource systems in general and only then discuss the role of unions and empirical results. Nevertheless, you may find it convenient to read part of the Booth references (on the role of unions in the organisation of employment relationships) now. MR is a very good general reference for this topic, but be warned: even though it does not involve any mathematics, it is conceptually demanding. MR 10 is a good start. An easier start would be to read the relevant material from BOR, which is not complete though. The relevant parts of BDS are more complete, but also quite a bit harder. Freeman and Medoff (1984) is the standard reference on the "two faces" of unions. Polachek and Siebert (1993) and Lazear (1996) are useful alternative sources on human resource systems. I will prepare notes for this part of the course as well. CWOD report extensively on human resource practices in the UK, but unfortunately I have no access to the book right now.

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    Contact information

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    Last modified:  by Jaap Abbring