Advanced Search
MyIDEAS: Login

Trade Union Membership and Dismissals

Contents:

Author Info

  • Goerke, Laszlo

    ()
    (IAAEU, University of Trier)

  • Pannenberg, Markus

    ()
    (Bielefeld University of Applied Sciences)

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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp5222.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5222.

as in new window
Length: 31 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5222

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

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

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Moreton, David R., 1998. "An open shop trade union model of wages, effort and membership," European Journal of Political Economy, Elsevier, vol. 14(3), pages 511-527, August.
  2. Freeman, Richard B, 1980. "The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits, and Separations," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 643-73, June.
  3. Schnabel, Claus & Wagner, Joachim, 2005. "Determinants of Union Membership in 18 EU Countries : Evidence from Micro Data, 2002/03," Discussion Papers 31, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  4. Lixin Cai & Amy Y.C. Liu, 2008. "Union Wage Effects in Australia: Is There Variation along the Distribution?," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 496-510, December.
  5. Blanchflower, David G. & Bryson, Alex, 2007. "The Wage Impact of Trade Unions in the UK Public and Private Sectors," IZA Discussion Papers 3055, Institute for the Study of Labor (IZA).
  6. K.G. Knight & Paul Latreille, 2000. "Discipline, Dismissals and Complaints to Employment Tribunals," British Journal of Industrial Relations, London School of Economics, vol. 38(4), pages 533-555, December.
  7. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer, vol. 24(1), pages 141-165, January.
  8. Lucifora, Claudio, 1998. "The impact of unions on labour turnover in Italy:: Evidence from establishment level data," International Journal of Industrial Organization, Elsevier, vol. 16(3), pages 353-376, May.
  9. Booth, Alison L. & Bryan, Mark L., 2001. "The union membership wage-premium puzzle: is there a free rider problem?," ISER Working Paper Series 2001-09, Institute for Social and Economic Research.
  10. Christian Grund, 2006. "Severance payments for dismissed employees in Germany," European Journal of Law and Economics, Springer, vol. 22(1), pages 49-71, July.
  11. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2009. "The Long-Term Impact of Job Displacement in Germany During the 1982 Recession on Earnings, Income, and Employment," Discussion Papers 0910-07, Columbia University, Department of Economics.
  12. Budd, J.W. & Na, I.G., 1994. "The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Papers 94-09, Minnesota - Industrial Relations Center.
  13. Kenneth A. Couch, 2001. "Earnings losses and unemployment of displaced workers in Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(3), pages 559-572, April.
  14. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-94, October.
  15. Goerke, Laszlo & Pannenberg, Markus, 2003. "Norm-Based Trade Union Membership: Evidence for Germany," IZA Discussion Papers 962, Institute for the Study of Labor (IZA).
  16. Booth, Alison L & Chatterji, Monojit, 1994. "Union Membership and Wage Bargaining When Membership is Not Compulsory," CEPR Discussion Papers 884, C.E.P.R. Discussion Papers.
  17. Eger, Thomas, 2003. "Opportunistic termination of employment contracts and legal protection against dismissal in Germany and the USA," International Review of Law and Economics, Elsevier, vol. 23(4), pages 381-403, December.
  18. Bernhard Boockmann & Susanne Steffes, 2010. "Workers, Firms, or Institutions: What Determines Job Duration for Male Employees in Germany?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 64(1), pages 109-127, October.
  19. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-10, November.
  20. Goerke, Laszlo & Pannenberg, Markus, 2010. "An economic analysis of dismissal legislation: Determinants of severance pay in West Germany," International Review of Law and Economics, Elsevier, vol. 30(1), pages 71-85, March.
  21. David Margolis, 2000. "Worker Displacement in France," Working Papers 2000-01, Centre de Recherche en Economie et Statistique.
  22. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  23. Laszlo Goerke & Markus Pannenberg, 2007. "Trade Union Membership and Works Councils in West Germany," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 14(2), pages 154 - 175.
  24. Jo Blanden & Stephen Machin, 2002. "Cross-Generation Correlations of Union Status For Young People in Britain," CEP Discussion Papers dp0553, Centre for Economic Performance, LSE.
  25. Papke, Leslie E. & Wooldridge, Jeffrey M., 2008. "Panel data methods for fractional response variables with an application to test pass rates," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 121-133, July.
  26. Mike Ingham, 1995. "Union joining: an empirical test of the social custom model," Applied Economics Letters, Taylor & Francis Journals, vol. 2(8), pages 245-247.
  27. Elke J. Jahn, 2009. "Do firms obey the law when they fire workers? Social criteria and severance payments in Germany," International Journal of Manpower, Emerald Group Publishing, vol. 30(7), pages 672-691, November.
  28. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Work councils and separations: voice, monopoly, and insurance effects," Discussion Papers 62, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  29. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521464673, October.
  30. Ozkan Eren, 2009. "Does Membership Pay off for Covered Workers? A Distributional Analysis of the Free Rider Problem," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 62(3), pages 367-380, April.
  31. Andrew K. G. Hildreth, 2000. "Union Wage Differentials for Covered Members and Nonmembers in Great Britain," Journal of Labor Research, Transaction Publishers, vol. 21(1), pages 133-147, January.
  32. Koevoets, Wim, 2007. "Union wage premiums in Great Britain: Coverage or membership?," Labour Economics, Elsevier, vol. 14(1), pages 53-71, January.
  33. Gerlach, Knut & Stephan, Gesine, 2005. "Individual tenure and collective contracts," IAB Discussion Paper 200510, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  34. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The reform of the German works constitution act: a critical assessment," Discussion Papers 16, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  35. Helge Berger & Michael Neugart, 2012. "How German Labor Courts Decide: An Econometric Case Study," German Economic Review, Verein für Socialpolitik, vol. 13(1), pages 56-70, 02.
  36. Jones, Stephen R G & McKenna, C J, 1994. "A Dynamic Model of Union Membership and Employment," Economica, London School of Economics and Political Science, vol. 61(242), pages 179-89, May.
  37. Martin Beck & Bernd Fitzenberger, 2004. "Changes in Union Membership Over Time: A Panel Analysis for West Germany," LABOUR, CEIS, vol. 18(3), pages 329-362, 09.
  38. Haile, Getinet Astatike, 2009. "The Nature and Extent of Job Separations in Germany: Some New Evidence from SOEP," IZA Discussion Papers 4216, Institute for the Study of Labor (IZA).
  39. Schnabel, Claus, 2002. "Determinants of trade union membership," Discussion Papers 15, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  40. Danielle Venn, 2009. "Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators," OECD Social, Employment and Migration Working Papers 89, OECD Publishing.
  41. Booth, Alison L. & Francesconi, Marco, 1999. "Job mobility in 1990s Britain: does gender matter?," ISER Working Paper Series 99-26, Institute for Social and Economic Research.
  42. repec:wop:humbsf:1999-35 is not listed on IDEAS
  43. Moreton, David, 1999. "A Model of Labour Productivity and Union Density in British Private Sector Unionised Establishments," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 322-44, April.
  44. Bergemann, Annette & Mertens, Antje, 2004. "Job Stability Trends, Layoffs, and Transitions to Unemployment: An Empirical Analysis for West Germany," IZA Discussion Papers 1368, Institute for the Study of Labor (IZA).
  45. repec:iza:izadps:dp875 is not listed on IDEAS
  46. Kornelius Kraft, 2006. "On Estimating the Effect of Co-Determination on Personnel Turnover," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(2), pages 287-305.
  47. Medoff, James L, 1979. "Layoffs and Alternatives under Trade Unions in U.S. Manufacturing," American Economic Review, American Economic Association, vol. 69(3), pages 380-95, June.
  48. Burda, Michael C. & Mertens, Antje, 1999. "Estimating wage losses of displaced workers in Germany," SFB 373 Discussion Papers 1999,35, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  49. Jo Blanden & Stephen Machin, 2003. "Cross-generation correlations of union status for young people in Britain," LSE Research Online Documents on Economics 334, London School of Economics and Political Science, LSE Library.
  50. Edward J. Schumacher, 1999. "What Explains Wage Differences Between Union Members and Covered Nonmembers?," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 493-512, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Goerke, Laszlo & Pannenberg, Markus, 2012. "Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform," IZA Discussion Papers 6777, Institute for the Study of Labor (IZA).
  2. Veliziotis, Michail, 2010. "Trade unions and unpaid overtime in Britain," ISER Working Paper Series 2010-43, Institute for Social and Economic Research.
  3. Martin Beck & Bernd Fitzenberger, 2004. "Changes in Union Membership Over Time: A Panel Analysis for West Germany," LABOUR, CEIS, vol. 18(3), pages 329-362, 09.
  4. 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.
  5. 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.
  6. 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.
  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. 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.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. SOEP based publications

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5222. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.