The Structure of Firm-Specific Labour Unions
AbstractIn this paper we investigate trade union formation. To this end we apply a model with two types of labour where both groups decide on whether they prefer to be represented by either two independent craft-specific (professional) labour unions or by a joint (encompassing) labour union. Applying the asymmetric Nash bargaining solution, we find that it is beneficial for at least one group of labourers to resist a unification and to form instead its own independent labour union - and in some cases even both groups are worse off under the umbrella of a joint union. Consequently, a joint union must be considered as a rather unstable institution. As a mirror image, profits are lower if the firm bargains with two independent craft unions. This explains why employers vehemently oppose recent split offs of some occupational groups from existing unions and from stipulated tariff unions.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 13-080/I.
Date of creation: 13 Jun 2013
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trade-union formation; wage-employment bargains; Nash bargaining solution; encompassing and craft-specific labour unions; trade union merger;
Other versions of this item:
- Thorsten Upmann & Julia MÃ¼ller, 2014. "The Structure of Firm-Specific Labour Unions," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, TÃ¼bingen, Mohr Siebeck, TÃ¼bingen, vol. 170(2), pages 336-385, June.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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