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Why only some industries unionize: insights from reciprocity theory

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  • FLYNN, SEAN

Abstract

This paper argues that the degree to which a given industry’s labor contracts are complete or incomplete is the major factor determining whether its workforce will be unionized. For instance, assembly line industries feature complete labor contracts because of the nature of the production technology: Either a worker keeps up with the line, or he does not. In such a situation, there is no chance for a reciprocal gift exchange under which firms offer high wages in exchange for high effort levels. The result is low wages that make workers prone to unionization. By contrast, jobs that feature incomplete contracts (lawyers, computer programmers, economists) already have reciprocity and gift exchange in place. Such benefits guarantee to workers that their better interests will be looked after by a management that wishes to maintain a positive and productive labor-management interaction.
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  • Flynn, Sean, 2005. "Why only some industries unionize: insights from reciprocity theory," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 99-120, June.
  • Handle: RePEc:cup:jinsec:v:1:y:2005:i:01:p:99-120_00
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    Cited by:

    1. Flynn, Sean Masaki & Donnelly, Michael, 2012. "Does labor contract completeness drive unionization? Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 445-454.

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