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Trade Union Membership and Dismissals

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  • Goerke, Laszlo

    (IAAEU, University of Trier)

  • Pannenberg, Markus

    (Bielefeld University of Applied Sciences)

Abstract

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.

Suggested Citation

  • Goerke, Laszlo & Pannenberg, Markus, 2010. "Trade Union Membership and Dismissals," IZA Discussion Papers 5222, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5222
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    More about this item

    Keywords

    dismissal; free-riding; trade union membership; survey data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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