This note introduces labour market imperfection in an otherwise Heckscher-Ohlin-Samuelson (HOS) model and provides a theory of unionized wage formation. It demonstrates that this framework satisfies the Stolper-Samuelson theorem and the magnification effect and that it is capable of producing...

We study the implications of product and labor market imperfections for equilibrium unemployment under both exogenous and endogenous capital intensity. With endogenous capital intensity, stronger labor market imperfections always increase equilibrium unemployment. The relationship between the...

This paper presents a simple model of imperfect labor markets with endogenous labor market participation and home production. We show that a two-sector economy (home and market) implies a three-state labor market when labor market imperfections take the form of an irreversible entry cost...

It is increasingly recognized that labor markets are pervasively imperfectly competitive, that there are rents to the employment relationship for both worker and employer. This chapter considers why it is sensible to think of labor market as imperfectly competitive, reviews estimates on the size...

A growing empirical literature attributes much of the productivity advantages of large, "superstar" firms to their adoption of best practice management techniques that allow them to better identify and use talented workers. The reasons for the incomplete adoption of these "structured management...

This paper examines how collective bargaining through unions and workplace co-determination through works councils relate to labour market imperfections and how labour market imperfections relate to employer wage premia. Based on representative German plant data for the years 1999-2016, we...

This paper examines how collective bargaining through unions and workplace codetermination through works councils shape labour market imperfections and how labour market imperfections matter for employer wage premia. Based on representative German plant data for the years 1999–2016, we...

According to human capital theory training underinvestment can arise in case of imperfect competition in the labour markets and when workers are credit constrained. In both cases training policies have to be considered in order to increase the amount of training and to alleviate the consequences...