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Public sector wage settlement and the threat of outsourcing

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Abstract

This paper investigates the impact of outsourcing on wage settlement in the public sector. The study characterizes the equilibrium wage offered by the public sector union to a government bureau competing against private sector firms. It is predicted that the union will offer a concession wage in an attempt to block outsourcing when its members' outside employment options are sufficiently unattractive and will offer a non-concession wage otherwise. The study contributes to the literature on outsourcing and wage determination in the public sector.

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Authors and Affiliations

  1. York University, Canada

    Gervan Fearon

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  1. Gervan Fearon
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Fearon, G. Public sector wage settlement and the threat of outsourcing. Atlantic Economic Journal 32, 161–174 (2004). https://doi.org/10.1007/BF02299435

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