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Why Unions Survive: Understanding How Unions Overcome The Free-Rider Problem

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  • Richard Murphy

Abstract

This paper provides evidence for why individuals join unions instead of free-riding. I model membership as legal insurance. To test the model, I use the incidence of news stories concerning allegations against teachers in the UK as a plausibly exogenous shock to demand for such insurance. I find that, for every five stories occurring in a region, teachers are 2.2 percentage points more likely to be members in the subsequent year. These effects are larger when teachers share characteristics with the news story and can explain 45 percent of the growth in teacher union membership between 1992 and 2010.

Suggested Citation

  • Richard Murphy, 2019. "Why Unions Survive: Understanding How Unions Overcome The Free-Rider Problem," NBER Working Papers 25924, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25924
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    Cited by:

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    2. Michail Veliziotis & Guy Vernon, 2023. "From monopoly to voice effects? British workplace unionism and productivity performance into the new millennium," British Journal of Industrial Relations, London School of Economics, vol. 61(3), pages 574-594, September.
    3. Julia Cagé & Malka Guillot, 2021. "Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns," Working Papers hal-03877993, HAL.
    4. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2020. "Do Public Subsidies of Union Membership Increase Union Membership Rates?," DoQSS Working Papers 20-14, Quantitative Social Science - UCL Social Research Institute, University College London.
    5. Munch, Jakob R. & Olney, William W., 2024. "Offshoring and the Decline of Unions," IZA Discussion Papers 17116, Institute of Labor Economics (IZA).
    6. Egidio Farina & Colin Green & Duncan McVicar, 2020. "Zero Hours Contracts and Their Growth," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 507-531, September.
    7. Jeffrey Clemens & Michael R. Strain, 2020. "Public Policy and Participation in Political Interest Groups: An Analysis of Minimum Wages, Labor Unions, and Effective Advocacy," NBER Working Papers 27902, National Bureau of Economic Research, Inc.
    8. Clemens, Jeffrey & Strain, Michael R., 2023. "Why Do Labor Unions Advocate for Minimum Wage Increases?," IZA Discussion Papers 16059, Institute of Labor Economics (IZA).
    9. Dillan Bono‐Lunn, 2024. "The impacts of U.S. right‐to‐work laws on free riding, unionization, and compensation," Southern Economic Journal, John Wiley & Sons, vol. 90(3), pages 769-791, January.
    10. Giannakopoulos, Nicholas & Nicolitsas, Daphne, 2022. "Employers' associations and trade unions: co-existence or more?," GLO Discussion Paper Series 1140, Global Labor Organization (GLO).
    11. Laszlo Goerke, 2020. "Unions and Workers' Well-being," IAAEU Discussion Papers 202008, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

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    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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