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The Rise and Fall of Unions in the U.S

Union membership displayed an inverted-U-shaped pattern over the 20th century, while the distribution of income sketched a U. A model of unions is developed to analyze these phenomena. There is a distribution of firms in economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union decides how many firms to organize and its members' wage rate. Simulation of the developed model establishes that skilled-biased technological change, which affects the productivity of skilled labor relative to unskilled labor, can potentially explain the above facts. Statistical analysis suggests that skill-biased technological change is an important factor in de-unionization.

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Paper provided by Economie d'Avant Garde in its series Economie d'Avant Garde Research Reports with number 19.

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Date of creation: Feb 2012
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Handle: RePEc:eag:rereps:19
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