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Anticipation, Free-Rider Problem, and Adaptation to Trade Union: Re-examining the Curious Case of Dissatisfied Union Members

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  • Powdthavee, Nattavudh

    (Nanyang Technological University, Singapore)

Abstract

This paper documents evidence that rejects the paradox of dissatisfied union members. Using eleven waves of the BHPS, it studies the past, contemporaneous, and future effects of union membership on job satisfaction. By separating union "free-riders" from other nonmembers in the fixed effects equations, I find significant anticipation effects to unionism for prospective members and covered nonmembers of both genders. Workers go on to report, on average, a significant net increase in overall job satisfaction at the year unionization occurs. Nonetheless, adaptation to unionism is complete within the first few years of joining a unionized firm. One hypothesis for this is that workers adapt their reported satisfaction over time to support their union bargaining efforts, which would be consistent with the explanation given by Freeman and Medoff (1984) of union’s role in fanning the flame of discontent to the management during contract negotiations.

Suggested Citation

  • Powdthavee, Nattavudh, 2010. "Anticipation, Free-Rider Problem, and Adaptation to Trade Union: Re-examining the Curious Case of Dissatisfied Union Members," IZA Discussion Papers 4806, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4806
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    1. Alison L. Booth & Mark L. Bryan, 2004. "The Union Membership Wage-Premium Puzzle: Is There a Free Rider Problem?," ILR Review, Cornell University, ILR School, vol. 57(3), pages 402-421, April.
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    More about this item

    Keywords

    longitudinal; adaptation; anticipation; job satisfaction; union membership; union coverage; free-rider;
    All these keywords.

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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