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Research Seminar by Benjamin Bental (University of Haifa): "Declining Labor Shares and Bargaining Power: An Institutional Explanation"

Monday, October 19 ICEF, CAS and Department of microeconomic analysis held the research seminar.
Presenter: Benjamin Bental (University of Haifa)
Topic: "Declining Labor Shares and Bargaining Power: An Institutional Explanation" (joint with Dominique Demougin) (pdf)
Video version

Abstract: We model the design of labor market institutions in an economy characterized by moral hazard and irreversible investment. In this setting, the institutional setting affects the bargaining power of labor at the optimum the allocation of bargaining power balances the aforementioned frictions. We examine the impact of improved monitoring and investigate the implication upon labor share, effort and investment. The model’s predictions are consistent with recent decreasing labor shares and wages per effective labor units observed in most OECD countries. It is also consistent with rising labor productivity and declining ratio between effective labor and capital found in many of these countries.

Venue: Pokrovski Bulvar, 11, Room Zh-822


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