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Union Membership and Employment Dynamics: A Note

Author

Listed:
  • Marcus Dittrich
  • Beate Schirwitz

Abstract

We analyze union behavior in a model with membership dynamics and compare the labor market outcomes to static union models. Based on empirical findings we modify standard models and show that the well-known result that static models overstate distortions caused by unions only holds in the special case of firm-level wage setting. If, however, the union is big enough to determine employment for the whole sector, it rather depends on both the elasticity of labor demand and union’s time preference whether static frameworks overrate or even underrate unions’ distortions.

Suggested Citation

  • Marcus Dittrich & Beate Schirwitz, 2010. "Union Membership and Employment Dynamics: A Note," CESifo Working Paper Series 3173, CESifo.
    • Handle: RePEc:ces:ceswps:_3173
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    References listed on IDEAS

    as
    1. Jones, Stephen R. G., 1987. "Union membership and employment dynamics," Economics Letters, Elsevier, vol. 25(2), pages 197-200.
    2. repec:bla:econom:v:54:y:1987:i:215:p:355-65 is not listed on IDEAS
    3. Chang, Juin-jen & Lai, Ching-chong, 1997. "Union membership and employment dynamics with endogenous union density," Economics Letters, Elsevier, vol. 57(1), pages 119-125, November.
    4. repec:bla:econom:v:55:y:1988:i:217:p:1-19 is not listed on IDEAS
    5. Marcus Dittrich, 2008. "Union wage setting in a dual labour market: the role of centralisation," International Economic Journal, Taylor & Francis Journals, vol. 22(4), pages 461-470.
    6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Elsayyad, May & Konrad, Kai A., 2012. "Fighting multiple tax havens," Journal of International Economics, Elsevier, vol. 86(2), pages 295-305.
    2. Jens Horbach & Markus Janser, 2016. "The role of innovation and agglomeration for employment growth in the environmental sector," Industry and Innovation, Taylor & Francis Journals, vol. 23(6), pages 488-511, August.
    3. Cabo, Francisco & Martín-Román, Ángel L., 2017. "Dynamic collective bargaining. Frictional effects under open-shop industrial relations," MPRA Paper 77562, University Library of Munich, Germany.
    4. Beate Schirwitz, 2013. "Business Fluctuations, Job Flows and Trade Unions - Dynamics in the Economy," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 47.

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    More about this item

    Keywords

    unions; endogenous membership; bargaining centralization;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • 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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