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How Trade Unions Increase Welfare

  • Alejando Donado


    (Department of Economics, University of Würzburg, Germany)

  • Klaus Wälde

    (Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, Germany)

Historically, worker movements have played a crucial role in making workplaces safer. Firms traditionally oppose better health standards. According to our in- terpretation, workplace safety is costly for firms but increases average health of workers and thereby aggregate labour supply. A laissez-faire approach in which firms set safety standards is suboptimal as workers are not fully informed of health risks associated with jobs. Safety standards set by better-informed trade unions are output and welfare increasing.

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Paper provided by Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz in its series Working Papers with number 1010.

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Length: 26 pages
Date of creation: 19 Aug 2010
Date of revision: 19 Aug 2010
Handle: RePEc:jgu:wpaper:1010
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  8. Agell, J., 1998. "On the Benefits from Rigid Labour Markets: Norms, Market Failures, and Social Insurance," Papers 1998:17, Uppsala - Working Paper Series.
  9. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-95, September.
  10. Joshua Hall & Peter Leeson, 2007. "Good for the Goose, Bad for the Gander: International Labor Standards and Comparative Development," Journal of Labor Research, Springer, vol. 28(4), pages 658-676, September.
  11. Tito Boeri & Michael C. Burda, 2008. "Preferences for Collective versus Individualised Wage Setting," SFB 649 Discussion Papers SFB649DP2008-021, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  12. Paul Fenn & Simon Ashby, 2004. "Workplace Risk, Establishment Size and Union Density," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 461-480, 09.
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