<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This paper analyses the choice of the bargaining agenda in a public/private unionised monopoly, and investigates whether the traditional higher efficiency of the state ownership of a monopoly holds when the labour market is unionised. First, we find that both a private and public monopoly always adopts a Right-to-Manage agenda. Second, a public firm pays a higher wage. Third, we show that privatisation could ensure a higher social welfare. This rather unexpected result may emerge provided that the Government has a high evaluation of the workers’ welfare, and the union is strong and/or wage aggressive. Therefore, our results suggest that privatisation 1) should be socially preferred depending only on the strength and wage aggressiveness of unions, and 2) rather paradoxically, is preferred when the Government is more careful about workers’ welfare. Our results may have policy implications especially in the post-communist countries, where the debate on privatisation is ubiquitously high and, differently between various countries, Government and unions may oscillate between left- or right-wing, and strength or weakness, respectively.</p></abstract>

This paper analyses the choice of the bargaining agenda in a public/private unionised monopoly, and investigates whether the traditional higher efficiency of the state ownership of a monopoly holds when the labour market is unionised. First, we find that both a private and public monopoly always adopts a Right-to-Manage agenda. Second, a public firm pays a higher wage. Third, we show that privatisation could ensure a higher social welfare. This rather unexpected result may emerge provided that the Government has a high evaluation of the workers’ welfare, and the union is strong and/or wage aggressive. Therefore, our results suggest that privatisation 1) should be socially preferred depending only on the strength and wage aggressiveness of unions, and 2) rather paradoxically, is preferred when the Government is more careful about workers’ welfare. Our results may have policy implications especially in the post-communist countries, where the debate on privatisation is ubiquitously high and, differently between various countries, Government and unions may oscillate between left- or right-wing, and strength or weakness, respectively.

Privatisation or State Ownership When Labour Market is Unionised?

University of Pisa, Department of Economics and Management, Via Cosimo Ridolfi, 10, I –56124 Pisa (PI),

Kozminski University, Department of Economics, Jagiellońska Street, 57/59 – 03301 – Warsaw,

Folia Oeconomica Stetinensia

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Privatisation or State Ownership When Labour Market is Unionised?"}

This paper analyses the choice of the bargaining agenda in a public/private unionised monopoly, and investigates whether the traditional higher efficiency of...

Privatisation or State Ownership When Labour Market is Unionised?

Published Online: Dec 30, 2016

Page range: 21 - 36

Received: Oct 08, 2015

Accepted: Jun 11, 2016

DOI: https://doi.org/10.1515/foli-2016-0002

Keywords
Public and private monopoly, Efficient Bargaining, Right-to-manage, Firm-union bargaining agenda

© 2016 University of Szczecin

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Privatisation or State Ownership When Labour Market is Unionised?

Published Online: Dec 30, 2016

Page range: 21 - 36

Received: Oct 08, 2015

Accepted: Jun 11, 2016

DOI: https://doi.org/10.1515/foli-2016-0002

KeywordsPublic and private monopoly, Efficient Bargaining, Right-to-manage, Firm-union bargaining agenda

© 2016 University of Szczecin

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Public and private monopoly, Efficient Bargaining, Right-to-manage, Firm-union bargaining agenda