This dissertation investigates the effect of the worker's fallback position on the wage determination process, specifically, on the wage slowdown in the 1980s. It is argued that the failure of the traditional wage models to account for the wage slowdown in the 1980s and some other unusual wage developments is attributable to the neglect of an important dimension in the wage determination process, namely, the worker's fallback position. The dissertation also reexamines the role of the worker's fallback position on the changing cyclical variability of wages in the postwar period. It is argued in chapter 2 that the worker's fallback position occupies a central position in the labor discipline model (and in models of bargaining). The theoretical model developed is subjected to econometric estimation with the estimates of the worker's fallback position in chapter 3. It is shown that the wage change equation, when supplemented by the fallback position, provides a superior empirical explanation for the wage slowdown in the 1980s to the traditional wage equations, which are obviously under-specified. It is argued in chapter 4 that the theoretical framework of labor discipline model is inconsistent with some hypotheses that ascribe the decline in the cyclical variability of wages to the increase in the worker's fallback position. They are not empirically confirmed, either. An alternative hypothesis which links the changes in the cyclical variability of wages to the degree of cyclicity of the fallback position is proposed and it is roughly consistent with the postwar experiences. The dissertation concludes by discussing limitations with this study and normative issues as to the worker's fallback position.
| Identifer | oai:union.ndltd.org:UMASS/oai:scholarworks.umass.edu:dissertations-8267 |
| Date | 01 January 1991 |
| Creators | Shim, Jae Yong |
| Publisher | ScholarWorks@UMass Amherst |
| Source Sets | University of Massachusetts, Amherst |
| Language | English |
| Detected Language | English |
| Type | text |
| Source | Doctoral Dissertations Available from Proquest |
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