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A Biological Model of Unions

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  • Michael Kremer
  • Benjamin A. Olken

Abstract

This paper applies principles from evolutionary biology to the study of unions. We show that unions which maximize the present discounted wages of current members will be displaced in evolutionary competition by unions with more moderate wage policies that allow their firms to live longer. This suggests that unions with constitutional incumbency advantages that allow leaders to moderate members' wage demands may have a selective advantage. The model also suggests that industries with high turnover of firms will have low unionization rates, and that there may be one equilibrium with high unionization and long-lived firms and another with low unionization and short-lived firms. These predictions seem broadly consistent with the data.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8257.

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Date of creation: Apr 2001
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Publication status: published as Olken, Benjamin A. and Michael Kremer. “A Biological Model of Unions." American Economic Journal: Applied Economics 1, 2 (April 2009): 150-175.
Handle: RePEc:nbr:nberwo:8257

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  1. Barry T. Hirsch & David A. MacPherson, 1993. "Union membership and coverage files from the Current Population Surveys: Note," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(3), pages 574-578, April.
  2. William T. Dickens & Jonathan S. Leonard, 1985. "Accounting for the decline in union membership, 1950û1980," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(3), pages 323-334, April.
  3. Richard B. Freeman, 1997. "Spurts in Union Growth: Defining Moments and Social Processes," NBER Working Papers 6012, National Bureau of Economic Research, Inc.
  4. Caballero, R-J & Hammour, M-L, 1996. "The Macroeconomics of Specificity," Working papers 96-25, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Richard B. Freeman & Morris M. Kleiner, 1999. "Do unions make enterprises insolvent?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 510-527, July.
  6. Card, David & Olson, Craig A, 1995. "Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 32-61, January.
  7. Paula B. Voos, 1983. "Union organizing: Costs and benefits," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(4), pages 576-591, July.
  8. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
  9. Benjamin F. Jones & Benjamin A. Olken, 2005. "Do Leaders Matter? National Leadership and Growth Since World War II," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 835-864, August.
  10. Michael D. Bordo & Claudia Goldin & Eugene N. White, 1998. "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century," NBER Books, National Bureau of Economic Research, Inc, number bord98-1, May.
  11. Clark, Kim B & Freeman, Richard B, 1980. "How Elastic is the Demand for Labor?," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 509-20, November.
  12. Feenstra, Robert & Markusen, James R. & Rose, Andrew K, 1998. "Understanding the Home Market Effect and the Gravity Equation: The Role of Differentiating Goods," CEPR Discussion Papers 2035, C.E.P.R. Discussion Papers.
  13. Moene, K.O. & Wallerstein, M. & Hoel, M., 1992. "Bargaining Structure and Economic Performance," Memorandum 10/1992, Oslo University, Department of Economics.
  14. Barry T. Hirsch, 2004. "What Do Unions Do for Economic Performance?," Journal of Labor Research, Transaction Publishers, vol. 25(3), pages 415-456, July.
  15. William T. Dickens & Jonathan S. Leonard, 1984. "Accounting For The Decline in Union Membership," NBER Working Papers 1275, National Bureau of Economic Research, Inc.
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Cited by:
  1. Thomas J. Holmes, 2006. "Geographic spillover of unionism," Staff Report 368, Federal Reserve Bank of Minneapolis.

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