T HE proposition that imperfections in product and labor markets lead to wage rigidity has been stressed by many authors in their analysis of wage inflation.' The most commonly held view is that wage differentials which result from these imperfections behave countercyclically. That is, periods of rapid inflation and/or low unemployment are believed to be associated with reduction of the wage premium attributed to both unionization and oligopolistic structure. On the labor market side it is argued that wage rigidity is primarily due to lags introduced by collective bargaining.7 In periods of low demand union wage levels are maintained through long term agreements. On the upswing these same long term agreements do not allow the union wage to react as quickly as the nonunion wage to increases in demand. Cross-sectional estimates of economy-wide union/nonunion differentials are often used to support this hypothesis.3 On the product market side it is often argued that concentrated industries have the ability to raise prices in periods of economic slack. This market power is a permissive factor which may allow workers in these industries to demand a share of the excess profits.4 Of course, the work force must have some method of demanding this share. It is usually assumed that union power is relatively great in these concentrated industries. Thus, this argument is really conditioned on imperfections in both the labor and product market, and is therefore much closer to an interaction hypothesis than a pure oligopolistic structure hypothesis. Proponents of this argument further hypothesize that concentrated industries do not increase prices as fast as competitive industries in an economic upturn. Wage differentials between concentrated and unconcentrated industries are therefore expected to narrow in periods of rapidly increasing prices. With one exception,5 the support for this hypothesis comes from studies of wage changes in concentrated versus unconcentrated industries.6 This paper is a reexamination of the wage rigidity hypotheses. The impacts of unionization and concentration on average wage levels are first estimated for a series of cross-sectional observations in manufacturing between 1947 and 1976. The differences in these cross-sectional impacts across time are then analyzed using rates of inflation and unemployment levels as explanatory variables.

In this article, we analyze the impact of uncertainty on the hiring process. We show the connection between models of statistical discrimination where uncertainty can work against groups that have less reliable indicators of future productivity and models of option value where uncertainty about future productivity can be beneficial for these groups. These models generate hypotheses about the relationship between ex ante hiring patterns and ex post productivity. This is applied to the market for NFL football players. We provide various estimates of NFL success, which suggest that statistical discrimination and option value influence choices in this market.

This paper formulates and estimates a model for the determination of employer and union demand for multiemployer (vs. single employer) bargaining units. Utility-maximizing, risk-averse firms and unions are both assumed to weigh the impact of each type of bargaining unit on the expected level and variability of profits and wages, respectively. The model is tested on a 1975 sample of 3,486 individual collective bargaining agreements. Because either party can generally leave a multiemployer unit without the other party's consent, a partially observed bivariate probit model is used to estimate demand for structure. It is found that the forgone profits due to a multiemployer unit (relative to a single-firm unit) lower firm demands for this type of unit, while forgone wages in a multiemployer unit (relative to a single-firm unit) lower union demand for this type of unit.

A stractThe theory of wage indexation implies that if workers are more risk averse than firms, then workers will pay a price in order to obtain wage indexation. This prediction is tested on a sample of 3,115 U.S. manufacturing collective bargaining negotiations from 1967 to 1982. The dependent variable is the expected real wage level taking into account expected cost of living payments (Colas). Using instrumental variables or fixed effects techniques to account for the endogeneity of indexation, ve find a 2% to 22% real wage premium paid to get a Cola. However, the 2% figure is most consistent with existing estimates of worker risk aversion and union-nonunion wage differentials.