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A Competitive Theory of Monopoly Unionism

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  • Edward P. Lazear

Abstract

This paper sets up a microeconomic theory of labor unions. It discusses their formation and goals, their hierarchical structure, and the nature of rent distribution. The theory provides predictions for the probability that an industry or occupation will be unionized, the proportion of that industry that will be unionized, and observed wage differentials within that industry. It discusses the way that those values change in response to changes in the supply of labor, demand for labor, cost of organizing the union, and cost of defeating the union. Institutions such as featherbedding, fringe benefits, and seniority are rationalized in this framework. The model is consistent with competitive factor and product markets.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0672.

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Date of creation: May 1981
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Publication status: published as Lazear, Edward P. "A Competitive Theory of Monopoly Unionism." The American Economic Review, Vol. 73, No. 4. (September 1983) pp. 631-643. Journal ofterature, Vol. 22, No. 1, (March 1984) Abstract only, p. 479.
Handle: RePEc:nbr:nberwo:0672

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Cited by:
  1. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2002. "Labour Market Institutions and Demographic Employment Patterns," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3448, C.E.P.R. Discussion Papers.
  2. Corneo, G., 1992. "Semi-Unionized Bargaining with Endogenous Membership and Management Opposition," DELTA Working Papers, DELTA (Ecole normale supérieure) 92-13, DELTA (Ecole normale supérieure).
  3. Edgar Preugschat, 2009. "Unionization Patterns and Firm Reallocation," 2009 Meeting Papers, Society for Economic Dynamics 1114, Society for Economic Dynamics.
  4. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
  5. Addison, John T. & Heywood, John S. & Wei, Xiangdong, 2001. "Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS," IZA Discussion Papers 352, Institute for the Study of Labor (IZA).
  6. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, Elsevier, vol. 14(5), pages 848-868, October.
  7. Robin Naylor, 1995. "Unions in Decline?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 22, pages 127-142.
  8. Richard Blundell, 1993. "Offre de travail et fiscalité : une revue de la littérature," Économie et Prévision, Programme National Persée, Programme National Persée, vol. 108(2), pages 1-18.
  9. Pablo Ruiz Verdú, 2002. "Employer Behavior When Workers Can Unionize," Business Economics Working Papers, Universidad Carlos III, Departamento de Economía de la Empresa wb020803, Universidad Carlos III, Departamento de Economía de la Empresa.
  10. John DiNardo & Kevin F. Hallock, 2000. "When Unions "Mattered": Assessing the Impact of Strikes on Financial Markets: 1925-1937," NBER Working Papers 7794, National Bureau of Economic Research, Inc.
  11. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, Elsevier, vol. 39(2), pages 275-292, February.
  12. Steven G. Allen, 1987. "Declining Unionization in Construction: The Facts and the Reasons," NBER Working Papers 2320, National Bureau of Economic Research, Inc.

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