IDEAS home Printed from
   My bibliography  Save this article

Firms' Rents, Workers' Bargaining Power and the Union Wage Premium


  • Thomas Breda


This article identifies the wage premium associated with firm-level union recognition in France. An average premium of 2% is found despite the fact that most workers are already covered by industry-level agreements. To explore the origin of the premium, I construct a simple bargaining model from which I derive three predictions, which are tested empirically using matched employer–employee data. The main prediction is that if intra-firm bargaining is behind the union wage premium, the latter increases with the amount of quasi-rents available in the firms that unions organise. This prediction is validated empirically when firms' market shares are used as a proxy for their rents.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Thomas Breda, 2015. "Firms' Rents, Workers' Bargaining Power and the Union Wage Premium," Economic Journal, Royal Economic Society, vol. 125(589), pages 1616-1652, December.
  • Handle: RePEc:wly:econjl:v:125:y:2015:i:589:p:1616-1652

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    2. Philippe Askenazy & Thomas Breda, 2019. "Electoral Democracy at Work," PSE Working Papers halshs-02191304, HAL.
    3. Dale-Olsen, Harald, 2019. "Creative Destruction, Social Security Uptake and Union Networks," IZA Discussion Papers 12546, Institute of Labor Economics (IZA).
    4. Alessia Matano & Paolo Naticchioni, 2017. "The Extent of Rent Sharing along the Wage Distribution," British Journal of Industrial Relations, London School of Economics, vol. 55(4), pages 751-777, December.
    5. Agénor, Pierre-Richard & Lim, King Yoong, 2018. "Unemployment, growth and welfare effects of labor market reforms," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 19-38.
    6. Pedro Silva Martins, 2019. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 591-622, October.
    7. de Pinto, Marco & Lingens, Jörg, 2019. "The impact of unionization costs when firm-selection matters," Labour Economics, Elsevier, vol. 60(C), pages 50-63.
    8. Thang Ngoc Bach & Canh Quang Le & Thang Van Nguyen, 2021. "Rent Sharing, Investment, and Collective Bargaining: Evidence from Employee‐Level Data in Vietnam," The Developing Economies, Institute of Developing Economies, vol. 59(1), pages 3-38, March.
    9. de Pinto, Marco & Michaelis, Jochen, 2019. "The labor market effects of trade union heterogeneity," Economic Modelling, Elsevier, vol. 78(C), pages 60-72.
    10. Marco de Pinto & Jochen Michaelis, 2017. "Firm Selection and the Role of Union Heterogeneity," MAGKS Papers on Economics 201743, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    11. Panu Poutvaara & Till Nikolka & Daniel Leithold & Katrin Oesingmann & Daniela Wech, 2017. "Vergleichende Studie über die Befugnisse und die Repräsentativität der Arbeitnehmervertreter in französischen und deutschen Unternehmen," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 84, October.
    12. Lingens, Jörg & De Pinto, Marco & Bauer, Christian, 2016. "The Impact of Organization Costs when Firm-selection Matters," VfS Annual Conference 2016 (Augsburg): Demographic Change 145620, Verein für Socialpolitik / German Economic Association.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:econjl:v:125:y:2015:i:589:p:1616-1652. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.