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Trade Union Membership and Dismissals

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  • Laszlo Goerke
  • Markus Pannenberg

Abstract

In Germany, there is no trade union membership wage premium, while the membership fee amounts to 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union membership which has hitherto not been documented: in West Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we can show that roughly 50% of the observed raw differential in individual dismissal rates can be explained by the estimated average partial effect of union membership.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3196.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3196

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Keywords: dismissal; free-riding; trade union membership; survey data;

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References

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Citations

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Cited by:
  1. Laszlo Goerke & Markus Pannenberg, 2012. "Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform," IAAEU Discussion Papers, Institute of Labour Law and Industrial Relations in the European Union (IAAEU) 201207, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Michail Veliziotis, 2013. "Trade Unions and Unpaid Overtime in Britain," Working Papers 20131304, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  3. Haggeney, Isabelle & Fitzenberger, Bernd & Ernst, Michaela, 1998. "Wer ist noch Mitglied in den Gewerkschaften? Eine Panelanalyse für Westdeutschland," ZEW Discussion Papers 98-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Martin Beck & Bernd Fitzenberger, 2004. "Changes in Union Membership Over Time: A Panel Analysis for West Germany," LABOUR, CEIS, CEIS, vol. 18(3), pages 329-362, 09.
  5. Heinz, Matthias & Drzensky, Frank, 2013. "The Hidden Costs of Downsizing," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79764, Verein für Socialpolitik / German Economic Association.
  6. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.
  7. Grund, Christian & Schmitt, Andreas, 2013. "Works Councils, Quits and Dismissals in Germany," IZA Discussion Papers 7361, Institute for the Study of Labor (IZA).
  8. Faccini, Renato & Rosazza Bondibene, Chiara, 2012. "Labour market institutions and unemployment volatility: evidence from OECD countries," Bank of England working papers 461, Bank of England.

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