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A Theory of Union Power and Labor Turnover


  • Kuhn, K.U.
  • Padilla, A.J.


In this paper we develop a theory of union power based on the aggregation of bargaining power of individual workers with firm specific skills. Union power depends on the ease of replacement from internal and external labor markets. Unions increase the bargaining power of insiders only in states of the world in which the firm would like to retain insiders but not hire outsiders. We show that union formation leads to inefficient retention of workers in the firm.

Suggested Citation

  • Kuhn, K.U. & Padilla, A.J., 1996. "A Theory of Union Power and Labor Turnover," Papers 72, Boston University - Industry Studies Programme.
  • Handle: RePEc:fth:bostin:72

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    References listed on IDEAS

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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects


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