Insider Power, Outsider Ineffectiveness and Wage Setting Institutions: Evidence from Australia

Insider-outsider theories have been advanced to explain a range of phenomena, principally the persistence of unemployment. This paper uses data from the Australian Workplace Industrial Relations Survey 1995, and regional labour force survey data, to test this model. The paper also examines how enterprise bargaining influences the relative power positions of insiders and outsiders. The paper finds provisional support for the insider-outsider distinction, and for the idea that enterprise level wage bargaining enhances insider power at the expense of outsiders