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A Dynamic Model of Trade Union Behaviour

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  • Kidd, David P
  • Oswald, Andrew J

Abstract

This paper constructs a dynamic model of trade-union behavior in which union membership is endogenous. Unemployed workers are assumed to leave their union (as they seem to in reality) and the union must therefore solve an intertemporal optim ization problem. The results imply that conventional static models ov erstate the distortions caused by monopoly unionism and that the rece nt empirical mod-els of union behavior may be misspecified. The paper 's analysis can be seen as an attempt to construct a model of the pos t-entry closed shop. Copyright 1987 by The Review of Economic Studies Limited.

Suggested Citation

  • Kidd, David P & Oswald, Andrew J, 1987. "A Dynamic Model of Trade Union Behaviour," Economica, London School of Economics and Political Science, vol. 54(215), pages 355-365, August.
  • Handle: RePEc:bla:econom:v:54:y:1987:i:215:p:355-65
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    Cited by:

    1. Schirwitz, Beate & Dittrich, Marcus, 2006. "A Dynamic Model of Union Behaviour. The Role of an Endogenous Outside Option and Bargaining Centralisation," Dresden Discussion Paper Series in Economics 07/06, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    2. Kazanas, Thanassis & Miaouli, Natasha, 2014. "Wage-setting and capital in unionized markets: Evidence from South Europe," Economic Modelling, Elsevier, vol. 37(C), pages 368-376.
    3. Bridgman, Benjamin, 2015. "Competition, work rules and productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 136-149.
    4. repec:sbe:breart:v:18:y:1998:i:1:a:2840 is not listed on IDEAS
    5. Winker, Peter, 1996. "Bündnis für Arbeit: Eine Randnotiz," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 76(7), pages 372-380.
    6. Almas Heshmati & Ilham Haouas, 2004. "The effects of union wage-settings on firms' production factor decisions," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 415-420.
    7. Halko, Marja-Liisa, 2003. "Buffer funding of unemployment insurance in a dynamic labour union model," Research Discussion Papers 24/2003, Bank of Finland.
    8. Bruno Chiarini & Elisabetta Marzano, 2009. "Interaction between Underground Employment and Unions in Selected Italian Industries," Revue économique, Presses de Sciences-Po, vol. 60(5), pages 1155-1180.
    9. Bruno Chiarini & Massimo Giannini, 2000. "A Model Of Union Behaviour And Benefits Under Uncertainty - Did Thatcher'S Benefits Policy Increase Employment And Reduce Union Power?," Working Papers 5_2000, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    10. Dittrich, Marcus & Schirwitz, Beate, 2011. "Union membership and employment dynamics: A note," Economics Letters, Elsevier, vol. 110(1), pages 38-40, January.
    11. Nyssens, Marthe & Van der Linden, Bruno, 2000. "Embeddedness, cooperation and popular-economy firms in the informal sector," Journal of Development Economics, Elsevier, vol. 61(1), pages 175-204, February.
    12. Chang, Juin-jen & Lai, Ching-chong, 1997. "Union membership and employment dynamics with endogenous union density," Economics Letters, Elsevier, vol. 57(1), pages 119-125, November.
    13. Loïc Cadiou & Julien Genet & Jean-Louis Guérin, 2002. "Évolutions démographiques et marché du travail : des liens complexes parfois contradictoires," Économie et Statistique, Programme National Persée, vol. 355(1), pages 139-156.
    14. Chiarini, Bruno & Piselli, Paolo, 2005. "Business cycle, unemployment benefits and productivity shocks," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 670-690, December.
    15. Franz, Wolfgang, 1993. "Unvollkommene Arbeitsmärkte in makroökonomischen Modellen: Eine Übersicht," Discussion Papers 1, University of Konstanz, Center for International Labor Economics (CILE).
    16. Bruno Chiarini & Paolo Piselli, 2012. "Equilibrium earning premium and pension schemes: The long-run macroeconomic effects of the union," Discussion Papers 2_2012, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    17. Cabo, Francisco & Martín-Román, Ángel L., 2017. "Dynamic collective bargaining. Frictional effects under open-shop industrial relations," MPRA Paper 77562, University Library of Munich, Germany.
    18. Adriana Cassoni, 1997. "A brief survey on the role of trade unions in labour market," Documentos de Trabajo (working papers) 0697, Department of Economics - dECON.
    19. Lai, Ching-chong & Chang, Juin-jen & Chang, Wen-ya, 2001. "Currency devaluation in an open-shop union," International Review of Economics & Finance, Elsevier, vol. 10(1), pages 61-74.
    20. Gonzaga, Gustavo & Scandiuzzi, João Carlos, 1998. "How Does Government Wage Policy Affect Wage Bargaining in Brazil?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 18(1), May.
    21. repec:eee:labeco:v:48:y:2017:i:c:p:1-22 is not listed on IDEAS
    22. Bruno Chiarini & Paolo Piselli, 2000. "Aggregate Fluctuations In A Unionized Labor Market," Working Papers 2_2000, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.

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