CORPORATISM, LABOR UNIONS AND THE SAFETY NET

This paper models corporatism as the attainment of outcomes superior t o those when individual parties act alone. This idea is developed in t he context of union-government interactions in the determination of wa ges and unemployment benefits. A central finding is that while corpora tism is welfare-improving for the actors involved, it yields few clear implications for the evolution of wages, employment, benefits or outp ut. It may, therefore, be unwise to employ 'corporatism indices' in ma croeconometric analyses without explicitly accounting for bargaining s tructures, information, and especially preferences. (C) 1997 Elsevier Science B.V.