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A Model of Union Formation

Author

Listed:
  • Westermark, A.

Abstract

In an analysis of the formation of unions within a single firm, this paper addresses conditions under which encompassing unions form. It is shown that a production function satisfying decreasing marginal productivity leads to the formation of encompassing unions. This result holds for different ways of dividing the surplus within the union. The effects of changes in heterogeneity, e.g. increased demand for skilled labor, are also analyzed. In the most reasonable setup, a change in heterogeneity does not affect the decision whether to form a union or not. This contrasts with the result in June (1989).

Suggested Citation

  • Westermark, A., 1999. "A Model of Union Formation," Papers 1999:8, Uppsala - Working Paper Series.
    • Handle: RePEc:fth:uppaal:1999:8
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    Cited by:

    1. Klaas J. Beniers & Robert A.J. Dur, 2003. "Product Market Competition and Trade Union Structure," Tinbergen Institute Discussion Papers 03-005/1, Tinbergen Institute, revised 26 Aug 2003.
    2. John Kennan, 2001. "Uniqueness of Positive Fixed Points for Increasing Concave Functions on Rn: An Elementary Result," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(4), pages 893-899, October.
    3. Aleksandar Vasilev, 2019. "Are Labor Unions Important for Business Cycle Fluctuations: Lessons from Bulgaria (1999-2016)," Bulgarian Economic Papers bep-2019-02, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Jan 2019.
    4. Aleksandar Vasilev, 2020. "Are labor unions important for business cycle fluctuations? Lessons from Bulgaria," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 143-161, March.
    5. Eriksson, Stefan & Gottfries, Nils, 2005. "Ranking of job applicants, on-the-job search, and persistent unemployment," Labour Economics, Elsevier, vol. 12(3), pages 407-428, June.
    6. Ester Faia & Lorenza Rossi, 2013. "Union Power, Collective Bargaining, And Optimal Monetary Policy," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 408-427, January.
    7. Marco Maffezzoli, 2001. "Non-Walrasian Labor Markets and Real Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(4), pages 860-892, October.

    More about this item

    Keywords

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    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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