Civil Society And The State: The Interplay Between Cooperation And Minimum Wage Regulation
By Philippe Aghion, Yann Algan, Pierre Cahuc. 2011
136 citations recorded by the source corpus.
In a cross-section of countries, state regulation of labor markets is strongly negatively correlated with the quality of labor relations. In this paper, we argue that these facts rei¬‚ect different ways to regulate labor markets, either through the state or through the civil society, depending on the degree of cooperation in the economy. We rationalize these facts with a model of learning of the quality of labor relations. Distrustful labor relations lead to low unionization and high demand for direct state regulation of wages. In turn, state regulation crowds out the possibility for workers to experiment negotiation and learn about the potential cooperative nature of labor relations. This crowding out effect can give rise to multiple equilibria: a “good†equilibrium characterized by cooperative labor relations and high union density, leading to low state regulation; and a “bad†equilibrium, characterized by distrustful labor relations, low union density and strong state regulation of the minimum wage.
Subfields: Political Science and International Relations, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/5eac7778ba454d4a16eb3391a6868d49bcca052b
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Citations in the corpus
- War Signals: A Theory of Trade, Trust and Conflict (2011, unknown): “As emphasized by Aghion et al. (2011), institutions and beliefs are not independent factors: on the one hand, institutions can matter through their e¤ect on the trust-building process, whilst on the other hand trust can in uence institutional developments that can deter con ict.”
- Culture and Institutions (2015, unknown): “Aghion et al. (2010) look at the interaction between generalized trust and regulation. Aghion, Algan, and Cahuc (2011) examine contemporary labor markets and identify a negative interaction between the existence of cooperative labor relations and the severity of a state-mandated minimum wage.”
- Family Values and the Regulation of Labor (2015, unknown): “A slightly different way of rephrasing this result is that in countries or historical periods when family ties can bring about great gains then the benefits of family ties may compensate for the loss of effi ciency caused by labor market regulations.”
- Politico-Economic Regimes and Attitudes: Female Workers under State Socialism (2019, background): “3See Aghion, Algan, and Cahuc (2011), Michau (2013), and Alesina et al. (2015) for theoretical analyses of the two-way causality between policies and cultural attitudes. to power in the late 1940s and up to the late 1960s, state socialist governments throughout the region made efforts to promote…”