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Call my Rep! How Unions Overcame the Free-Rider Problem

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  • Richard Murphy

Abstract

This paper proposes an explanation of why union membership has been increasing in some occupations, despite the opportunity to freeride on traditional union benefits. I model membership as legal insurance whose demand increases with the perceived risk of allegations. Using media reports on allegations against teachers as shocks to perceived risk, I find for every five reports occurring in a region, teachers are 2.5 percentage points more likely to be members in the subsequent year. These effects are larger when teachers share characteristics with the news story and explain 45 percent of the growth in teacher union membership since 1992.

Suggested Citation

  • Richard Murphy, 2017. "Call my Rep! How Unions Overcame the Free-Rider Problem," CESifo Working Paper Series 6362, CESifo.
    • Handle: RePEc:ces:ceswps:_6362
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp6362.pdf
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    References listed on IDEAS

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    1. Matthew Gentzkow & Jesse M. Shapiro & Michael Sinkinson, 2011. "The Effect of Newspaper Entry and Exit on Electoral Politics," American Economic Review, American Economic Association, vol. 101(7), pages 2980-3018, December.
    2. Caroline Minter Hoxby, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 671-718.
    3. David Blanchflower & Alex Bryson, 2008. "Union Decline in Britain," CEP Discussion Papers dp0864, Centre for Economic Performance, LSE.
    4. Lamla, Michael J. & Lein, Sarah M., 2014. "The role of media for consumers’ inflation expectation formation," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 62-77.
    5. Blanchflower, D. & Crouchley, R. & Estrin, S. & Oswald, A., 1990. "Unemployment And The Demand For Unions," Papers 372, London School of Economics - Centre for Labour Economics.
    6. Dr Alex Bryson & John Forth, 2010. "Trade Union Membership and Influence 1999-2009," National Institute of Economic and Social Research (NIESR) Discussion Papers 362, National Institute of Economic and Social Research.
    7. Alex Bryson & John Forth, 2010. "Trade Union Membership and Influence 1999-2009," CEP Discussion Papers dp1003, Centre for Economic Performance, LSE.
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    Cited by:

    1. Egidio Farina & Colin Green & Duncan McVicar, 2020. "Zero Hours Contracts and Their Growth," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 507-531, September.

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    More about this item

    Keywords

    unions; teachers; media; insurance;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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