A Competitive Theory of Monopoly Unionism
This paper sets up a microeconomic theory of labor unions. It discusses their formation and goals, their hierarchical structure, and the nature of rent distribution. The theory provides predictions for the probability that an industry or occupation will be unionized, the proportion of that industry that will be unionized, and observed wage differentials within that industry. It discusses the way that those values change in response to changes in the supply of labor, demand for labor, cost of organizing the union, and cost of defeating the union. Institutions such as featherbedding, fringe benefits, and seniority are rationalized in this framework. The model is consistent with competitive factor and product markets.
|Date of creation:||May 1981|
|Date of revision:|
|Publication status:||published as Lazear, Edward P. "A Competitive Theory of Monopoly Unionism." The American Economic Review, Vol. 73, No. 4. (September 1983) pp. 631-643. Journal ofterature, Vol. 22, No. 1, (March 1984) Abstract only, p. 479.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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NBER Working Papers
0306, National Bureau of Economic Research, Inc.
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- S. Rosen, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," Review of Economic Studies, Oxford University Press, vol. 36(2), pages 185-196.
- Harry G. Johnson & Peter Mieszkowski, 1970. "The Effects of Unionization on the Distribution of Income: A General Equilibrium Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 84(4), pages 539-561.
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