THE ROLE OF PUBLIC INCOME SECURITY PROGRAMS IN UNION WAGE DETERMINATION: THE CASE OF SCHOOL TEACHERS

JOSHUA L. SCHWARZ


DOI: 10.2190/70K3-YQ4A-DD3E-224N

Abstract

This study examines the role of the Unemployment Insurance and Aid to Families with Dependent Children programs in union wage determination for public school teachers. If teachers perceive a trade-off between wages and employment, then public policies reducing the cost of unemployment may increase negotiated wage levels. A politico-economic model of union wage determination is developed where bargaining outcomes are a function of union and management preferences as well as the bargaining power possessed by each side. The data to test this model come from a national sample of teacher collective bargaining agreements from 1978-1983. The study's results are consistent with the view that teachers or their unions are conscious of the potential employment consequences of their wage policies. Some public initiatives that reduce the probability and cost of unemployment are found to be positively associated with wages.

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