eprintid: 17764
rev_number: 19
eprint_status: archive
userid: 600
dir: disk0/00/01/77/64
datestamp: 2009-11-06 17:51:13
lastmod: 2015-07-23 09:37:47
status_changed: 2009-11-06 17:51:13
type: working_paper
metadata_visibility: show
item_issues_count: 0
creators_name: Aghion, P.
creators_name: Algun, Y.
creators_name: Cahuc, P.
creators_id: PAGHI04
creators_id: 
creators_id: 
title: Can policy interact with culture? minimum wage and the quality of labor relations
ispublished: pub
subjects: 12000
divisions: F24
abstract: Can public policy interfere with culture, such as beliefs and norms of cooperation? We investigate this question by evaluating the interactions between the State and the Civil Society, focusing on the labor market. International data shows a negative correlation between union density and the quality of labor relations on one hand, and state regulation of the minimum wage on the other hand. To explain this relation, we develop a model of learning of the quality of labor relations. State regulation crowds out the possibility for workers to experiment negotiation and learn about the true cooperative nature of participants in the labor market. This crowding out effect can give rise to multiple equilibria: a "good" equilibrium characterized by strong beliefs in cooperation, leading to high union density and low state regulation; and a "bad" equilibrium, characterized by distrustful labor relations, low union density and strong state regulation of the minimum wage. We then use surveys on social attitudes and unionization behavior to document the relation between minimum wage legislation and the beliefs about the scope of cooperation in the labor market.
date: 2008-09
publisher: National Bureau of Economic Research
official_url: http://www.nber.org/papers/w14327
vfaculties: VSHS
oa_status: green
language: eng
primo: open
primo_central: open_green
lyricists_name: Aghion, P
lyricists_id: PAGHI04
full_text_status: public
series: NBER Working Papers
number: 14327
place_of_pub: Cambridge, US
citation:        Aghion, P.;    Algun, Y.;    Cahuc, P.;      (2008)    Can policy interact with culture? minimum wage and the quality of labor relations.                    (NBER Working Papers  14327). National Bureau of Economic Research: Cambridge, US.       Green open access   
 
document_url: https://discovery.ucl.ac.uk/id/eprint/17764/1/17764.pdf