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Segmentation, Switching Costs and the Demand for Unionization in Britain

  • Alex Bryson
  • Rafael Gomez

This paper explains why some employees who favor unionization fail to join, and why others who wish to abandon union membership continue paying dues. Our explanation is based on a model where employees incur switching (search) costs when attempting to abandon (acquire) union membership. Empirical analysis for Britain confirms one of the main predictions from the switching-cost- model that segmentation in the market for unionization persists even when mandatory membership provisions are eliminated and economy-wide density falls. The importance of these and other empirical findings for both theory and policy are discussed.

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File URL: http://cep.lse.ac.uk/pubs/download/dp0568.pdf
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0568.

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Date of creation: May 2003
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Handle: RePEc:cep:cepdps:dp0568
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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