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Product Market Competition and Trade Union Structure

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Author Info
Klaas J. Beniers () (Faculty of Economics, Erasmus University Rotterdam)
Robert A.J. Dur () (Faculty of Economics, Erasmus University Rotterdam)

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Abstract

Trade unions tend to reduce the dispersion of wages among their members. Skilled workers may therefore have an incentive to separate from an encompassing union and organize into a separate craft union. In this paper, we examine a theoretical model to gain insight into the determinants of the number of trade unions at a firm. We show that imperfect competition in the product market may drive skilled and unskilled workers together, even though unskilled workers use their political power in the trade union to extract rents from the skilled workers. Additionally, we examine the influence of several features of production technology on trade union structure.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-005/1.

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Date of creation: 09 Jan 2003
Date of revision: 26 Aug 2003
Handle: RePEc:dgr:uvatin:20030005

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: product market competition trade union structure wage dispersion

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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References listed on IDEAS
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  1. Jun, Byoung Heon, 1989. "Non-cooperative Bargaining and Union Formation," Review of Economic Studies, Blackwell Publishing, vol. 56(1), pages 59-76, January. [Downloadable!] (restricted)
  2. Richard B. Freeman, 1982. "Union wage practices and wage dispersion within establishments," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 36(1), pages 3-21, October.
    Other versions:
  3. Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-97, June. [Downloadable!] (restricted)
  4. Richard B. Freeman, 1980. "Unionism and the dispersion of wages," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 34(1), pages 3-23, October.
    Other versions:
  5. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July. [Downloadable!] (restricted)
  6. Stewart, M.B., 1989. "Union Wage Differentials, Product Market Influences And The Division Of Rents," The Warwick Economics Research Paper Series (TWERPS) 323, University of Warwick, Department of Economics.
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  7. Agell, Jonas & Lommerud, Kjell Erik, 1992. "Union Egalitarianism as Income Insurance," Economica, London School of Economics and Political Science, vol. 59(235), pages 295-310, August. [Downloadable!] (restricted)
    Other versions:
  8. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July. [Downloadable!] (restricted)
  9. Lawrence Mishel, 1986. "The structural determinants of union bargaining power," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 40(1), pages 90-104, October.
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