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Product Market Competition, Union Organizing Activity, and Employer Resistence

  • John M. Abowd
  • Henry S. Farber

We develop and estimate a model of the union's optimal extent of organizing activity that accounts for the decision of employers regarding resistance to union organizing. The central exogenous variable in the analysis is the quantity of quasi-rents per worker available to be split between unions and employers. We measure available quasi-rents per worker as the difference per worker between total industry revenues net of raw materials costs and labor costs evaluated at the opportunity cost of the workers. Using two-digit industry level data for thirty-five U.S. industries for the period 1955 through 1986, we find that both organizing activity and employer resistance to unionization are positively related to available quasi-rents per worker. However, there is still a strong negative trend in union organizing activity and a strong positive trend in employer resistance after controlling for quasi-rents per worker. Thus, the explanation for the decline in union organizing activity and the increase in employer resistance to unionization since the mid 1970's lies elsewhere.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3353.

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Date of creation: May 1990
Date of revision:
Handle: RePEc:nbr:nberwo:3353
Note: LS
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  1. Abowd, John M, 1989. "The Effect of Wage Bargains on the Stock Market Value of the Firm," American Economic Review, American Economic Association, vol. 79(4), pages 774-800, September.
  2. Orley Ashenfelter & James N. Brown, 1985. "Testing the Efficiency of Employment Contracts," Working Papers 573, Princeton University, Department of Economics, Industrial Relations Section..
  3. Gibbons, R. & Katz, L., 1989. "Does Unmeasured Ability Explain Inter-Industry Wage Differences," Working papers 543, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February.
  5. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  6. Alan Carruth & Andrew Oswald, 1984. "Miners' Wages in Post-War Britain: An Application of a Model of Trade Union Behavior," Working Papers 558, Princeton University, Department of Economics, Industrial Relations Section..
  7. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S3-S39, June.
  8. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October.
  9. Nancy L. Rose, 1985. "The Incidence of Regulatory Rents in the Motor Carrier Industry," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 299-318, Autumn.
  10. repec:fth:harver:1464 is not listed on IDEAS
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