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Unions and Wage Determination: Can Monopsonist Unions Reduce Unemployment?

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  • Ana Paula MARTINS

    (Department of Economics, Universidade Católica Portuguesa, Portugal)

Abstract

This paper extends the standard closed shop union model of wage determination by introducing endogeneity of union membership. The labor market outcome with endogenous membership may differ when unions behave monopsonisticaly relative to the case where they are "membership-takers", resulting in higher or lower wages (more or less favorable contract curve in efficient bargaining) according to the form union´s utility function and/or implicit decision process value union size. Some notes are added highlighting the role of membership fees in the membership function determination of a union that works as a nonprofit organization.

Suggested Citation

  • Ana Paula MARTINS, 2016. "Unions and Wage Determination: Can Monopsonist Unions Reduce Unemployment?," Journal of Economics Bibliography, KSP Journals, vol. 3(4), pages 626-643, December.
    • Handle: RePEc:ksp:journ6:v:3:y:2016:i:4:p:626-643
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    References listed on IDEAS

    as
    1. Naylor, Robin & Raaum, Oddbjorn, 1993. "The Open Shop Union, Wages, and Management Opposition," Oxford Economic Papers, Oxford University Press, vol. 45(4), pages 589-604, October.
    2. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    3. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-595, September.
    4. Moreton, David R., 1998. "An open shop trade union model of wages, effort and membership," European Journal of Political Economy, Elsevier, vol. 14(3), pages 511-527, August.
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    More about this item

    Keywords

    Unions; Wage Determination Models; Union Membership; Union Bargaining; Corporatism; Monopsonist Union; (Collective Choice);
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • P42 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices

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