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The Trade-Off between Wages and Employment in Trade Union Objectives

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John H. Pencavel

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Abstract

This paper demonstrates that, contrary to a widely-held opinion, the determination of the goals of unions is fully amenable to empirical analysis. A characterization of the wage and employment-setting process in unionized markets is adopted and its qualitative implications examined. The first-order condition for this model is fitted to time- series data on the newspaper industry from ten cities. The Inter- national Typographical Union 's objective function reveals very restricted opportunities for substituting wages for employment in response to a change in the slope of the employer's labor demand function. Larger union locals place greater emphasis on wages versus employment than smaller union locals.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0870.

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Date of creation: Mar 1982
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Handle: RePEc:nbr:nberwo:0870

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  1. Rosen, Sherwin, 1970. "Unionism and the Occupational Wage Structure in the United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(2), pages 269-86, June. [Downloadable!] (restricted)
  2. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-81, December. [Downloadable!] (restricted)
  3. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October. [Downloadable!] (restricted)
  4. Amemiya, Takeshi, 1974. "The nonlinear two-stage least-squares estimator," Journal of Econometrics, Elsevier, vol. 2(2), pages 105-110, July. [Downloadable!] (restricted)
  5. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September. [Downloadable!] (restricted)
  6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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  1. Rosenzweig, Mark R. & Wolpin, Kenneth I., 1984. "Migration Selectivity and the Effects of Public Programs," Bulletins 8442, University of Minnesota, Economic Development Center. [Downloadable!]
  2. Tetsuo Ono, 2007. "Unemployment dynamics in an OLG economy with public pensions," Economic Theory, Springer, vol. 33(3), pages 549-577, December. [Downloadable!] (restricted)
  3. Alexander Kemnitz, 2002. "On the Political Economy of Low Skilled Immigration and the Welfare State," International Tax and Public Finance, Springer, vol. 9(4), pages 423-434, August. [Downloadable!] (restricted)
  4. David Card, 1986. "Efficient Contracts with Costly Adjustment: Short-RUn Employment Determination for Airline Mechanics," NBER Working Papers 1931, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Subhayu Bandyopadhyay, Sudeshna C. Bandyopadhyay, 2001. "Efficient bargaining, welfare and strategic export policy," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 10(2), pages 133-149, June. [Downloadable!] (restricted)
  6. Mattesini Fabrizio & Rossi Lorenza, 2007. "Productivity shocks and optimal monetary policy in a unionized labor market economy," wp.comunite 0023, Department of Communication, University of Teramo. [Downloadable!]
    Other versions:
  7. Mohamed Jellal & François-Charles Wolff, 2003. "Privatisation et négociation collective," Revue d’économie du développement, De Boeck Université, vol. 17(1), pages 73-99. [Downloadable!]
  8. Jeffrey S. Zax, 1985. "Municipal Employment, Municipal Unions, and Demand for Municipal Services," NBER Working Papers 1728, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Irmen, Andreas & Wigger, Berthold, 2001. "Trade Union Objectives and Economic Growth," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  10. Federico Boffa, 2004. "Redistributing through Unions," Labor and Demography 0402002, EconWPA. [Downloadable!]
  11. Heshmati, Almas & Haouas, Ilham, 2003. "The Effects of Union Wage-Settings on Firms' Production Factor Decisions," IZA Discussion Papers 689, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  12. Rossi, Lorenza & Mattesini, Fabrizio, 2007. "Productivity Shock and Optimal Monetary Policy in a Unionized Labor Market. Forthcoming: The Manchester School," MPRA Paper 8414, University Library of Munich, Germany, revised 2008. [Downloadable!]
  13. Alexander Kemnitz, . "Unemployment, Technology and the Welfare Effects of Immigration," IVS discussion paper series 611, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
  14. Henry S. Farber & Max H. Bazerman, 1989. "Divergent Expectations as a Cause of Disagreement in Bargaining: Evidence from a Comparison of Arbitration Schemes."," NBER Working Papers 2139, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. David G. Blanchflower & Andrew J. Oswald, 1990. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  16. Richard B. Freeman & Morris M. Kleiner, 1994. "Do Unions Make Enterprises Insolvent?," NBER Working Papers 4797, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Habib Ahmed & Stephen M. Miller, 1999. "A Model of Endogenous Union Density and Membership," Working papers 1999-01, University of Connecticut, Department of Economics. [Downloadable!]
  18. Mattesini Fabrizio & Rossi Lorenza, 2008. "Optimal monetary policy in economies with dual labor markets," wp.comunite 0037, Department of Communication, University of Teramo. [Downloadable!]
    Other versions:
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