Working Paper: CEPR ID: DP332
Authors: Alan Manning
Abstract: In a capitalist economy capitalists can sell their stake in a firm on the stock market whereas workers cannot sell their jobs. It is argued that when workers have some bargaining power this asymmetry in property rights leads to inefficiencies. The consequences of this are explored and certain policy options considered.
Keywords: dynamic bargaining; organizational choice; capitalism; stock market; labour markets
JEL Codes: J32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Inability of workers to sell their jobs (J63) | structural inefficiency in decision-making processes (D73) |
| Asymmetry of property rights (P14) | organizational choices that enhance bargaining position of capitalists (P12) |
| Current workers' decisions (J29) | future workers' welfare (J83) |
| Inefficient organizational forms chosen (D23) | future utility losses of workers (J17) |
| Productivity agreements and flexible working practices (J29) | long-term job losses for future workers (J63) |
| Job protection legislation (J58) | mitigate inefficiencies (D61) |