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How Successful Have Trade Unions Been?: A Utility-Based Indicator of Union Well-Being

  • John Pencavel

    ()

    (Stanford University)

Can conventional economic analysis help in defining and measuring the success of labor unions? In this paper, a general indicator of union welfare is proposed and particular expressions for the wage and employment objectives of unions are rearranged to derive measures of union success or welfare. These indicators combine two measures: union density and the relative union-nonunion wage gap. The indicators are applied to describe the movement of union welfare in the United States over the past eighty years, the differences in union success among groups of U.S. workers, and the variation in union well-being across countries. The results suggest that U.S. unions’ success peaked in the 1950s and 1960s; they have tended to benefit Black workers especially Black men, more than other groups; and, in recent decades, a very low unionization rate has contributed to make them less successful, overall, than unions in other countries with similar labor markets.

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Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 08-002.

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Date of creation: 2008
Date of revision:
Handle: RePEc:sip:dpaper:08-002
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  1. C. Bowdler & L. Nunziata, 2007. "Trade Union Density and Inflation Performance: Evidence from OECD Panel Data," Economica, London School of Economics and Political Science, vol. 74(293), pages 135-159, 02.
  2. repec:cup:cbooks:9780521464673 is not listed on IDEAS
  3. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  4. Orley Ashenfelter, 1971. "Racial Discrimination and Trade Unionism," Working Papers 390, Princeton University, Department of Economics, Industrial Relations Section..
  5. 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.
  6. Rees, Albert, 1989. "The Economics of Trade Unions," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226707105, June.
  7. Pencavel, John & Hartsog, Catherine E, 1984. "A Reconsideration of the Effects of Unionism on Relative Wages and Employment in the United States, 1920-1980," Journal of Labor Economics, University of Chicago Press, vol. 2(2), pages 193-232, April.
  8. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-81, December.
  9. Orley Ashenfelter & James N. Brown, 1985. "Testing the Efficiency of Employment Contracts," Working Papers 573, Princeton University, Department of Economics, Industrial Relations Section..
  10. Johnson, George E, 1985. " The Economic Theory of Trade Unions-An Introductory Survey: Comment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 194-96.
  11. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
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