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A Model of Union Formation

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Author Info

  • Westermark, A.

Abstract

In an analysis of the formation of unions within a single firm, this paper addresses conditions under which encompassing unions form. It is shown that a production function satisfying decreasing marginal productivity leads to the formation of encompassing unions. This result holds for different ways of dividing the surplus within the union. The effects of changes in heterogeneity, e.g. increased demand for skilled labor, are also analyzed. In the most reasonable setup, a change in heterogeneity does not affect the decision whether to form a union or not. This contrasts with the result in June (1989).

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Bibliographic Info

Paper provided by Uppsala - Working Paper Series in its series Papers with number 1999:8.

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Length: 38 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:uppaal:1999:8

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Postal: UPPSALA UNIVERSITY, DEPARTMENT OF ECONOMICS, S-751 20 UPPSALA SWEDEN.
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Web page: http://www.nek.uu.se/
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Keywords: LABOUR ; WORKERS' REPRESENTATION ; ENTERPRISES;

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References

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  1. Jun, Byoung Heon, 1989. "Non-cooperative Bargaining and Union Formation," Review of Economic Studies, Wiley Blackwell, vol. 56(1), pages 59-76, January.
  2. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414.
  3. Richard Freeman & Jeffrey Pelletier, 1991. "The Impact of Industrial Relations Legislation on British Union Density," NBER Working Papers 3167, National Bureau of Economic Research, Inc.
  4. Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-97, June.
  5. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
  6. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
  7. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
  8. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  9. Barry T. Hirsch, 1982. "The interindustry structure of unionism, earnings, and earnings dispersion," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 22-39, October.
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Citations

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Cited by:
  1. Ester Faia & Lorenza Rossi, 2009. "Unions Power, Collective Bargaining and Optimal Monetary Policy," Kiel Working Papers 1490, Kiel Institute for the World Economy.
  2. Kennan,J., 2001. "Uniqueness of positive fixed points for increasing concave functions on Rn : an elementary result," Working papers 2, Wisconsin Madison - Social Systems.
  3. Marco Maffezzoli, . "Non-Walrasian Labor Markets and Real Business Cycles," Working Papers 167, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Eriksson, S. & Gottfries, N., 2000. "Ranking of Job Applicants, On-the-Job Search and Persistent Unemployment," Papers 2000:3, Uppsala - Working Paper Series.

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