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Union Rent Seeking and Import Competition in U.S. Manufacturing

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We investigate how union rent seeking is affected by import competition. The myopic theory of union rent extraction assumes that unions attempt to maximize current rents. In such a scenario, unionization, even with import competition, may increase the rents earned by union workers. On the other hand, import competition may also induce unions to favor a more cooperative strategy in order to maintain insider employment. This empirical investigation at the industry level using data from 1975-1984 focuses on union rent seeking. This focus differentiates our study from previous work emphasizing union wages. The results indicate that union membership significantly and positively affects union rent seeking in the U.S. manufacturing sector, whereas import competition reduces union rents. Surprisingly, however, there is no compelling evidence that union rents are higher in more unionized import-competing industries as compared to the less unionized ones.

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Article provided by Transaction Publishers in its journal Journal of Labor Research.

Volume (Year): 21 (2000)
Issue (Month): 3 (July)
Pages: 477-487

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Handle: RePEc:tra:jlabre:v:21:y:2000:i:3:p:477-487
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