WAGE BARGAINING WITH ENDOGENOUS PROFITS, OVERTIME WORKING AND HETEROGENEOUS LABOR

This paper estimates the role of insider power in wage determination i n a unionized industry, examining the direction and magnitude of biase s which may arise through failure to control for variation in both hou rs of work and the composition of the labor force and through failure to control for the endogeneity of measured profits. Furthermore, by ex amining the extent to which rent-sharing is related to exogenous deman d shocks rather than to potentially endogenous productivity, we provid e a test of the bargaining and ''pure'' efficiency wage models. findin g that the majority of the insider weighting can be explained by the b argaining model.