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(What) do unions maximise? Evidence from survey data

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  • Peter G. Gahan

Abstract

Highly formalised models of union behaviour have been developed and are widely used within neoclassical economics. This approach is justified by the argument that most goals pursued by unions can be reduced to a wage (or wage-equivalent)--employment trade-off. However, the strong assumptions made about union goals and preferences, how these are determined and the range of issues over which a union will seek to bargain with a firm are not supported by extensive empirical evidence. This paper explores these issues through a survey of union leaders to ascertain the range of union goals and their preferences, and the types of issues over which unions bargain with employers. The results of the survey present convincing evidence that standard neoclassical models do not adequately capture union bargaining behaviour, or union goals and preferences. The findings presented here also throw open, but do not resolve, the question of whether unions are 'rational maximisers'. The most interesting result--not widely found within the economics or industrial relations literature--concerns the nature of union bargaining preferences. Union bargaining over employment appears to be asymmetric around current levels of employment, in that unions appear to care more about the employment implications of their bargaining strategies when they are likely to result in employment decreases. Copyright 2002, Oxford University Press.

Suggested Citation

  • Peter G. Gahan, 2002. "(What) do unions maximise? Evidence from survey data," Cambridge Journal of Economics, Oxford University Press, vol. 26(3), pages 279-297, May.
  • Handle: RePEc:oup:cambje:v:26:y:2002:i:3:p:279-297
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    Cited by:

    1. Marco Guerrazzi, 2020. "Wage and employment determination in a dynamic insider–outsider model," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 1-23, January.
    2. Bhattacharyya, Chandril & Ranjan Gupta, Manash, 2021. "Unionised labour market, environment and endogenous growth," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 29-44.
    3. Maiti, Dibyendu & Bhattacharyya, Chandril, 2020. "Informality, enforcement and growth," Economic Modelling, Elsevier, vol. 84(C), pages 259-274.
    4. Zanetti, Francesco, 2007. "A non-Walrasian labor market in a monetary model of the business cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 31(7), pages 2413-2437, July.
    5. Minas Vlassis & Nick Drydakis, 2012. "Wage discrimination and antidiscrimination policy in unionized industries," Journal of Economics, Springer, vol. 105(1), pages 45-62, January.
    6. Marco Guerrazzi & Pier Giuseppe Giribone, 2021. "Dynamic wage bargaining and labour market fluctuations: the role of productivity shocks," SN Business & Economics, Springer, vol. 1(8), pages 1-20, August.
    7. Martin Behrens & Andreas Pekarek, 2021. "Divided We Stand? Coalition Dynamics in the German Union Movement," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 503-531, June.
    8. Aleksandra Gregorič & Marc Steffen Rapp, 2019. "Board‐Level Employee Representation (BLER) and Firms’ Responses to Crisis," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(3), pages 376-422, July.
    9. Drydakis Nick, 2011. "Greek unions' preferences: measuring trends in the field. An exploratory note on the period 2008–2009," Transfer: European Review of Labour and Research, , vol. 17(4), pages 563-576, November.
    10. Ivlevs, Artjoms & Veliziotis, Michail, 2015. "What Do Unions Do in Times of Economic Crisis? Evidence from Central and Eastern Europe," IZA Discussion Papers 9466, Institute of Labor Economics (IZA).

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