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Wage bargaining, union membership, and the organization of unemployment insurance

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  • Holmlund, Bertil
  • Lundborg, Per

Abstract

The paper offers a theoretical analysis of a labor market institution known as the Gent system, which is a system where unions run unemployment insurance (UI) through government-subsidized UI funds. This sytem is practiced in four Nordic countries with comparatively very high unionization rates. The analysis shows that the Gent system is more conducive to unionization than a compulsory UI system if the Gent system is heavily subsidized by the government or if workers are strongly risk averse. Moreover, a rise in the share of benefits financed by union members is likely to reduce wages as well as union membership.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 6 (1999)
Issue (Month): 3 (September)
Pages: 397-415

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Handle: RePEc:eee:labeco:v:6:y:1999:i:3:p:397-415

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Web page: http://www.elsevier.com/locate/labeco

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References

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  1. A L Booth & M Chatterji, . "Union Membership And Wage Bargaining When Membership Is Not Compulsory," Dundee Discussion Papers in Economics 048, Economic Studies, University of Dundee.
  2. Lockwood, Ben & Manning, Alan, 1993. "Wage setting and the tax system theory and evidence for the United Kingdom," Journal of Public Economics, Elsevier, vol. 52(1), pages 1-29, August.
  3. Kiander, Jaakko, 1993. "Endogenous unemployment insurance in a monopoly union model when job search matters," Journal of Public Economics, Elsevier, vol. 52(1), pages 101-115, August.
  4. Naylor, Robin & Cripps, Martin, 1993. "An economic theory of the open shop trade union," European Economic Review, Elsevier, vol. 37(8), pages 1599-1620, December.
  5. Alan Carruth & Andrew Oswald, 1984. "Miners' Wages in Post-War Britain: An Application of a Model of Trade Union Behavior," Working Papers 558, Princeton University, Department of Economics, Industrial Relations Section..
  6. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October.
  7. Holmlund, Bertil & Lundborg, Per, 1989. "Unemployment insurance schemes for reducing the natural rate of unemployment," Journal of Public Economics, Elsevier, vol. 38(1), pages 1-15, February.
  8. Holmlund, Bertil & Lundborg, Per, 1988. " Unemployment Insurance and Union Wage Setting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(2), pages 161-72.
  9. Calmfors, L. & Forslund, A., 1989. "Wage Setting In Sweden," Papers 430, Stockholm - International Economic Studies.
  10. Jakobsson, Ulf, 1976. "On the measurement of the degree of progression," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 161-168.
  11. Booth, Alison L & Chatterji, Monojit, 1993. "Reputation, Membership and Wages in Open Shop Trade Union," Oxford Economic Papers, Oxford University Press, vol. 45(1), pages 23-41, January.
  12. Neumann, George & Pedersen, Peder J. & Westergard-Nielsen, Niels, 1991. "Long-run international trends in aggregate unionization," European Journal of Political Economy, Elsevier, vol. 7(3), pages 249-274, October.
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Citations

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Cited by:
  1. Laszlo Goerke & Markus Pannenberg, 2004. "Norm-Based Trade Union Membership: Evidence for Germany," German Economic Review, Verein für Socialpolitik, vol. 5(4), pages 481-504, November.
  2. Marja-Liisa Halko, 2004. "Buffer funding of unemployment insurance in a dynamic labour union model," Macroeconomics 0404030, EconWPA.
  3. Lai, Ching-chong & Chang, Juin-jen & Chang, Wen-ya, 2001. "Currency devaluation in an open-shop union," International Review of Economics & Finance, Elsevier, vol. 10(1), pages 61-74.
  4. Halko, Marja-Liisa, 2003. "Buffer funding of unemployment insurance in a dynamic labour union model," Research Discussion Papers 24/2003, Bank of Finland.
  5. Helge Sanner, 2003. "Self-financing Unemployment Insurance and Bargaining Structure," LABOUR, CEIS, vol. 17(2), pages 229-246, 06.
  6. Erling Barth & Karl O. Moene, 2009. "The Equality Multiplier," NBER Working Papers 15076, National Bureau of Economic Research, Inc.
  7. Schnabel, Claus, 2012. "Union Membership and Density: Some (Not So) Stylized Facts and Challenges," IZA Discussion Papers 6792, Institute for the Study of Labor (IZA).
  8. Goerke, Laszlo & Madsen, Jakob B., 2003. "Earnings-Related Unemployment Benefits in a Unionised Economy," IZA Discussion Papers 701, Institute for the Study of Labor (IZA).
  9. Daniele Checchi & Claudio Lucifora, 2002. "Unions and labour market institutions in Europe," Departmental Working Papers 2002-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  10. Daniele Checchi, 2000. "Time series evidence on union densities in European countries," Departmental Working Papers 2000-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  11. Goerke, Laszlo & Pannenberg, Markus, 2007. "Trade union membership and work councils in West Germany," Tübinger Diskussionsbeiträge 311, University of Tübingen, School of Business and Economics.
  12. Alho, Kari O. E., 2006. "Labour Market Institutions and the Effectiveness of Tax and Benefit Policies in Enchancing Employment: A General Equilibrium Analysis," Discussion Papers 1008, The Research Institute of the Finnish Economy.
  13. Petri Böckerman & Roope Uusitalo, 2005. "Union membership and the erosion of the Ghent system: Lessons from Finland," Labor and Demography 0508008, EconWPA.
  14. Goerke, Laszlo & Madsen, Jakob B., 2003. "Earnings-related unemployment benefits and unemployment," Economic Systems, Elsevier, vol. 27(1), pages 41-62, March.
  15. Goerke, Laszlo, 1998. "Bismarck versus Beveridge: Flat- and earnings-related unemployment insurance in an efficiency wage framework," Discussion Papers, Series 1 291, University of Konstanz, Department of Economics.
  16. Dittrich, Marcus, 2006. "Welfare Effects of Union Bargaining Centralisation in a Two-Sector Economy," MPRA Paper 11, University Library of Munich, Germany, revised Sep 2006.
  17. Pekka Sinko, 2003. "Subsidizing vs. Experience Rating of Unemployment Insurance in Unionized Labor Markets," Discussion Papers 319, Government Institute for Economic Research Finland (VATT).
  18. Schnabel, Claus, 2002. "Determinants of trade union membership," Discussion Papers 15, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.

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