IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/25924.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    Note: ED LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w25924.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kline Patrick & Santos Andres, 2012. "A Score Based Approach to Wild Bootstrap Inference," Journal of Econometric Methods, De Gruyter, vol. 1(1), pages 23-41, August.
    2. Caroline Minter Hoxby, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 671-718.
    3. David Roodman & James G. MacKinnon & Morten Ørregaard Nielsen & Matthew D. Webb, 2019. "Fast and wild: Bootstrap inference in Stata using boottest," Stata Journal, StataCorp LP, vol. 19(1), pages 4-60, March.
    4. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
    5. Christopher D. Carroll, 2003. "Macroeconomic Expectations of Households and Professional Forecasters," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 269-298.
    6. David S. Lee & Alexandre Mas, 2012. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961--1999," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 333-378.
    7. Michael F. Lovenheim & Alexander Willén, 2019. "The Long-Run Effects of Teacher Collective Bargaining," American Economic Journal: Economic Policy, American Economic Association, vol. 11(3), pages 292-324, August.
    8. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    9. Matthew Gentzkow & Jesse M. Shapiro & Michael Sinkinson, 2011. "The Effect of Newspaper Entry and Exit on Electoral Politics," American Economic Review, American Economic Association, vol. 101(7), pages 2980-3018, December.
    10. Alison L. Booth, 1985. "The Free Rider Problem and a Social Custom Model of Trade Union Membership," The Quarterly Journal of Economics, Oxford University Press, vol. 100(1), pages 253-261.
    11. van der Wiel, Karen, 2009. "Have You Heard the News? How Real-Life Expectations React to Publicity," IZA Discussion Papers 4064, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Giannakopoulos, Nicholas & Nicolitsas, Daphne, 2022. "Employers' associations and trade unions: co-existence or more?," GLO Discussion Paper Series 1140, Global Labor Organization (GLO).
    5. Laszlo Goerke, 2020. "Unions and Workers' Well-being," IAAEU Discussion Papers 202008, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Murphy, 2019. "Why unions: understanding how unions overcome the free-rider problem," CEP Discussion Papers dp1625, Centre for Economic Performance, LSE.
    2. Giommoni, Tommaso, 2021. "Exposure to corruption and political participation: Evidence from Italian municipalities," European Journal of Political Economy, Elsevier, vol. 68(C).
    3. W. Bentley MacLeod, 2006. "Reputations, Relationships and the Enforcement of Incomplete Contracts," CESifo Working Paper Series 1730, CESifo.
    4. Larsen, Vegard H. & Thorsrud, Leif Anders & Zhulanova, Julia, 2021. "News-driven inflation expectations and information rigidities," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 507-520.
    5. Claudia Keser & Jean-Louis Rullière & Marie Claire Villeval, 2004. "Le paradoxe de l'adhésion syndicale : une approche expérimentale en termes de jeu de bien public," Economie & Prévision, La Documentation Française, vol. 0(3), pages 81-92.
    6. Shi, Ying & Singleton, John D., 2019. "Expertise and Independence on Governing Boards: Evidence from School Districts," IZA Discussion Papers 12414, Institute of Labor Economics (IZA).
    7. Boxell, Levi, 2019. "Droughts, conflict, and the African slave trade," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 774-791.
    8. Gachter, Simon & Fehr, Ernst, 1999. "Collective action as a social exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 341-369, July.
    9. Eric Brunner & Joshua Hyman & Andrew Ju, 2020. "School Finance Reforms, Teachers' Unions, and the Allocation of School Resources," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 473-489, July.
    10. Kwon, Illoong & Jun, Daesung, 2015. "Information disclosure and peer effects in the use of antibiotics," Journal of Health Economics, Elsevier, vol. 42(C), pages 1-16.
    11. James G. MacKinnon & Morten Ørregaard Nielsen & Matthew D. Webb, 2022. "Fast and Reliable Jackknife and Bootstrap Methods for Cluster-Robust Inference," Working Paper 1485, Economics Department, Queen's University.
    12. Daniele Checchi, 2000. "Time series evidence on union densities in European countries," Departmental Working Papers 2000-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    13. James G. MacKinnon, 2019. "How cluster-robust inference is changing applied econometrics," Canadian Journal of Economics, Canadian Economics Association, vol. 52(3), pages 851-881, August.
    14. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
    15. Corneo, Giacomo & Jeanne, Olivier, 1994. "Investing in social norms," CEPREMAP Working Papers (Couverture Orange) 9404, CEPREMAP.
    16. Panos, Georgios & Theodossiou, Ioannis, 2009. "Union Mediation and Adaptation to Reciprocal Loyalty Arrangements," MPRA Paper 15471, University Library of Munich, Germany.
    17. Abadía Alvarado, Luz Karime & Gómez Soler, Silvia C. & Cifuentes González, Juanita, 2021. "The effect of teacher strikes on academic achievement: Evidence from Colombia," International Journal of Educational Development, Elsevier, vol. 82(C).
    18. Philippe Aghion & Yann Algan & Pierre Cahuc, 2008. "Can Policy Interact with Culture? Minimum Wage and the Quality of Labor Relations," Working Papers hal-00972820, HAL.
    19. Goerke, Laszlo, 1997. "Taxes in an open shop trade union model," Discussion Papers, Series II 346, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    20. Johnston, Andrew C., 2021. "Preferences, Selection, and the Structure of Teacher Pay," IZA Discussion Papers 14831, Institute of Labor Economics (IZA).

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:25924. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.