A Model of Union Formation
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 Jun (1989).
|Date of creation:||03 Jun 1999|
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- Blau, Francine D & Kahn, Lawrence M, 1996.
"International Differences in Male Wage Inequality: Institutions versus Market Forces,"
Journal of Political Economy,
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- Richard Freeman & Jeffrey Pelletier, 1989. "The Impact of Industrial Relations Legislation on British Union Density," NBER Working Papers 3167, National Bureau of Economic Research, Inc.
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- Horn, Henrik & Wolinsky, Asher, 1988. "Worker Substitutability and Patterns of Unionisation," Economic Journal, Royal Economic Society, vol. 98(391), pages 484-97, June.
- Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
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