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Do Public Subsidies of Union Membership Increase Union Membership Rates?

Author

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  • Barth, Erling

    (Institute for Social Research, Oslo)

  • Bryson, Alex

    (University College London)

  • Dale-Olsen, Harald

    (Institute for Social Research, Oslo)

Abstract

Using administrative linked employer-employee data for Norway we estimate the impact of changes in tax subsidies for union membership on individuals' membership probabilities. Increased subsidisation of the union good increases union take-up, while increased union fees reduce the demand for membership. The price elasticity of demand for union membership is - 7 percent in 2012 (the last year for which we have data) though effects are heterogeneous across types of worker. In the absence of the hikes in tax subsidies and holding workforce composition constant aggregate private sector union membership density would have fallen by 5 percentage points between 2001 and 2012. Since membership fees are a substantial part of unions' total revenues the findings have important implications for unions' viability. They are also significant because union bargaining strength, which is often proxied by union density, affects a range of social, economic and political outcomes.

Suggested Citation

  • Barth, Erling & Bryson, Alex & Dale-Olsen, Harald, 2020. "Do Public Subsidies of Union Membership Increase Union Membership Rates?," IZA Discussion Papers 13747, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13747
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    1. 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

    Keywords

    trade unions; union membership; wages; tax subsidies;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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