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Firms' Rents, Workers' Bargaining Power and the Union Wage Premium

Author

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  • Thomas Breda

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Abstract

This article identifies the wage premium associated with firm-level union recognition in France. An average premium of 2% is found despite the fact that most workers are already covered by industry-level agreements. To explore the origin of the premium, I construct a simple bargaining model from which I derive three predictions, which are tested empirically using matched employer–employee data. The main prediction is that if intra-firm bargaining is behind the union wage premium, the latter increases with the amount of quasi-rents available in the firms that unions organise. This prediction is validated empirically when firms' market shares are used as a proxy for their rents.

Suggested Citation

  • Thomas Breda, 2015. "Firms' Rents, Workers' Bargaining Power and the Union Wage Premium," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01307709, HAL.
  • Handle: RePEc:hal:pseose:halshs-01307709
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01307709
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    Cited by:

    1. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    2. Dale-Olsen, Harald, 2019. "Creative Destruction, Social Security Uptake and Union Networks," IZA Discussion Papers 12546, Institute of Labor Economics (IZA).
    3. Alessia Matano & Paolo Naticchioni, 2017. "The Extent of Rent Sharing along the Wage Distribution," British Journal of Industrial Relations, London School of Economics, vol. 55(4), pages 751-777, December.
    4. Agénor, Pierre-Richard & Lim, King Yoong, 2018. "Unemployment, growth and welfare effects of labor market reforms," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 19-38.
    5. Martins, Pedro S., 2019. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," GLO Discussion Paper Series 428, Global Labor Organization (GLO).
    6. de Pinto, Marco & Michaelis, Jochen, 2019. "The labor market effects of trade union heterogeneity," Economic Modelling, Elsevier, vol. 78(C), pages 60-72.
    7. Marco de Pinto & Jochen Michaelis, 2017. "Firm Selection and the Role of Union Heterogeneity," MAGKS Papers on Economics 201743, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. repec:ces:ifofob:84 is not listed on IDEAS
    9. Lingens, Jörg & De Pinto, Marco & Bauer, Christian, 2016. "The Impact of Organization Costs when Firm-selection Matters," Annual Conference 2016 (Augsburg): Demographic Change 145620, Verein für Socialpolitik / German Economic Association.
    10. Pedro S. Martins, 2018. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," Working Papers 93, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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    Keywords

    Firms'Rents;

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