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Trade Union Membership and Dismissals

  • Laszlo Goerke
  • Markus Pannenberg

In Germany, there is no trade union membership wage premium, while the membership fee amounts to 1% of the gross wage. Therefore, prima facie, there are strong incentives to freeride 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 West Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we can 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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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.362291.de/diw_sp0324.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 324.

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Length: 28 p.
Date of creation: 2010
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp324
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