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A Competitive Theory of Monopoly Unionism

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  • Lazear, Edward P

Abstract

This paper sets up a microeconomic theory of labor unions. It discusses their formation and goals, their hierarchical structure, and the nature of rent distribution. The theory provides predictions for the probability that an industry or occupation will be unionized, the proportion of that industry that will be unionized, and observed wage differentials within that industry. It discusses the way that those values change in response to changes in the supply of labor, demand for labor, cost of organizing the union, and cost of defeating the union. Institutions such as featherbedding, fringe benefits, and seniority are rationalized in this framework. The model is consistent with competitive factor and product markets.
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  • Lazear, Edward P, 1983. "A Competitive Theory of Monopoly Unionism," American Economic Review, American Economic Association, vol. 73(4), pages 631-643, September.
    • Handle: RePEc:aea:aecrev:v:73:y:1983:i:4:p:631-43
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    1. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-159, February.
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    3. James N. Dertouzos & John H. Pencavel, 1980. "Wage and Employment Determinants under Trade Unionism: The InternationalTypographical Union," NBER Working Papers 0570, National Bureau of Economic Research, Inc.
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    6. Jacob Mincer, 1981. "The Economics of Wage Floors," NBER Working Papers 0804, National Bureau of Economic Research, Inc.
    7. Diewert, W E, 1974. "The Effects of Unionization on Wages and Employment: A General Equilibrium Analysis," Economic Inquiry, Western Economic Association International, vol. 12(3), pages 319-339, September.
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    9. Freeman, Richard B, 1976. "Individual Mobility and Union Voice in the Labor Market," American Economic Review, American Economic Association, vol. 66(2), pages 361-368, May.
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    Citations

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    Cited by:

    1. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 833-867, October.
    2. Andreas Hauptmann, 2019. "Endogenous wage regime selection: A general equilibrium model," Economics Bulletin, AccessEcon, vol. 39(4), pages 2650-2663.
    3. Steven G. Allen, 1987. "Declining Unionization in Construction: The Facts and the Reasons," NBER Working Papers 2320, National Bureau of Economic Research, Inc.
    4. John DiNardo & Kevin F. Hallock, 2000. "When Unions "Mattered": Assessing the Impact of Strikes on Financial Markets: 1925-1937," NBER Working Papers 7794, National Bureau of Economic Research, Inc.
    5. Ben S. Bernanke & James Powell, 1986. "The Cyclical Behavior of Industrial Labor Markets: A Comparison of the Prewar and Postwar Eras," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 583-638, National Bureau of Economic Research, Inc.
    6. 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.
    7. Kim Hawtrey, 1990. "Dynamic Behaviour of a Unionized Solow‐Swan Economy," The Economic Record, The Economic Society of Australia, vol. 66(2), pages 81-92, June.
    8. Giacomo Corneo, 1993. "Semi-unionized bargaining with endogenous membership and management opposition," Journal of Economics, Springer, vol. 57(2), pages 169-188, June.
    9. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    10. Stephen Machin, 1995. "Plant Closures and Unionization in British Establishments," British Journal of Industrial Relations, London School of Economics, vol. 33(1), pages 55-68, March.
    11. Edgar Preugschat, 2009. "Unionization Patterns and Firm Reallocation," 2009 Meeting Papers 1114, Society for Economic Dynamics.
    12. Addison, John T. & Heywood, John S. & Wei, Xiangdong, 2001. "Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS," IZA Discussion Papers 352, Institute of Labor Economics (IZA).
    13. Robin Naylor, 1995. "Unions in Decline?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 22, pages 127-142.
    14. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
    15. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, vol. 14(5), pages 848-868, October.
    16. Richard Blundell, 1993. "Offre de travail et fiscalité : une revue de la littérature," Économie et Prévision, Programme National Persée, vol. 108(2), pages 1-18.
    17. John T. Addison & John S. Heywood & Xiangdong Wei, 2003. "New Evidence on Unions and Plant Closings: Britain in the 1990s," Southern Economic Journal, John Wiley & Sons, vol. 69(4), pages 822-841, April.
    18. Ruiz-Verdú, Pablo, 2002. "Employer behavior when workers can unionize," DEE - Working Papers. Business Economics. WB wb020803, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    19. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.

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