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A Biological Model of Unions

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  • Michael Kremer
  • Benjamin A. Olken

Abstract

This paper applies principles from evolutionary biology to the study of unions. We show that unions which maximize the present discounted wages of current members will be displaced in evolutionary competition by unions with more moderate wage policies that allow their firms to live longer. This suggests that unions with constitutional incumbency advantages that allow leaders to moderate members' wage demands may have a selective advantage. The model also suggests that industries with high turnover of firms will have low unionization rates, and that there may be one equilibrium with high unionization and long-lived firms and another with low unionization and short-lived firms. These predictions seem broadly consistent with the data.

Suggested Citation

  • Michael Kremer & Benjamin A. Olken, 2001. "A Biological Model of Unions," NBER Working Papers 8257, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8257
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    References listed on IDEAS

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    Cited by:

    1. Thomas J. Holmes, 2006. "Geographic spillover of unionism," Staff Report 368, Federal Reserve Bank of Minneapolis.
    2. Reshad N. Ahsan & Arghya Ghosh & Devashish Mitra, 2017. "International trade and unionization: Evidence from India," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(2), pages 398-425, May.
    3. Tony Fang & John S. Heywood, 2006. "Unionization and plant closure in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1173-1194, November.

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    More about this item

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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