utility. We show for a wage bargaining model that a stronger earningsrelationship of unemployment benefits may reduce wages …Evidently, the benefit-structure of the unemployment insurance has a significant influence onprofits and trade union … and increase employment. Thisraises the question as to how the benefit structure is determined in the political process... …

can affect the decision to join a trade union. Furthermore, a shift in risk attitudes can alter collective bargaining … that an overall increase in risk aversion contributes to wage moderation and promotes employment. …