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The Single-Mindedness of Labor Unions: Theory and Empirical Evidence

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Author Info
Canegrati, Emanuele

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Abstract

In this paper I analyse a labour market where the wage is endogenously determined according to an Efficient Bargaining process between a firm and a labour union whose members are partitioned into two social groups: the old and the young. Furthermore, I exploit the Single-Mindedness theory, which considers the existence of a density function which endogenously depends on leisure. I demonstrate that, when preferences of one group for leisure are higher than those of the other group the latter suffers from higher tax rates and with lower level of wage rates and lower levels of leisure. Finally, since the former is more single-minded, it may exploit its greater political power in order to get a positive intergenerational transfer. Empirical evidence from the WERS 2004 survey confirms main results of the model.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1398.

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Date of creation: Jan 2007
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Handle: RePEc:pra:mprapa:1398

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Related research
Keywords: bargaining models labour unions political economy single-mindedness

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Find related papers by JEL classification:
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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  1. Earle, John S & Pencavel, John, 1990. "Hours of Work and Trade Unionism," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S150-74, January. [Downloadable!] (restricted)
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  3. Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August. [Downloadable!] (restricted)
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  5. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January. [Downloadable!] (restricted)
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  6. Hinich, Melvin J., 1977. "Equilibrium in spatial voting: The median voter result is an artifact," Journal of Economic Theory, Elsevier, vol. 16(2), pages 208-219, December. [Downloadable!] (restricted)
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  7. Koskela, Erkki & Schob, Ronnie, 2002. " Optimal Factor Income Taxation in the Presence of Unemployment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(3), pages 387-404. [Downloadable!] (restricted)
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  8. Casey B. Mulligan & Xavier Sala-i-Martin, 2003. "Social Security, Retirement, and the Single-Mindedness of the Electorate," NBER Working Papers 9691, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Lindbeck, Assar & Snower, Dennis, 2002. "The Insider-Outsider Theory: A Survey," IZA Discussion Papers 534, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. McDonald, Ian M & Suen, Anthony, 1992. "On the Measurement and Determination of Trade Union Power," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 209-24, May.
  12. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-39, March. [Downloadable!] (restricted)
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  15. Erkki Koskela & Ronnie Schoeb, 2002. "Optimal Capital Taxation in Economies with Unionised and Competitive Labour Markets," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  16. Paola Profeta, 2002. "Retirement and Social Security in a Probabilistic Voting Model," International Tax and Public Finance, Springer, vol. 9(4), pages 331-348, August. [Downloadable!] (restricted)
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