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Trade union membership and dismissals

  • Goerke, Laszlo
  • Pannenberg, Markus

In Germany, there is no trade union membership wage premium and a membership fee of 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union membership which has hitherto not been documented: in Western Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we are able to show that roughly 50% of the observed raw differential in individual dismissal rates can be explained by the estimated average partial effect of union membership.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 6 ()
Pages: 810-821

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Handle: RePEc:eee:labeco:v:18:y:2011:i:6:p:810-821
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