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Trade Union Membership and Dismissals

  • Goerke, Laszlo

    ()

    (IAAEU, University of Trier)

  • Pannenberg, Markus

    ()

    (Bielefeld University of Applied Sciences)

In Germany, there is no trade union membership wage premium, while the membership fee amounts to 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union membership which has hitherto not been documented: in West Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we can show that roughly 50% of the observed raw differential in individual dismissal rates can be explained by the estimated average partial effect of union membership.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5222.

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Length: 31 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5222
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