IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/0672.html
   My bibliography  Save this paper

A Competitive Theory of Monopoly Unionism

Author

Listed:
  • Edward P. Lazear

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.

Suggested Citation

  • Edward P. Lazear, 1981. "A Competitive Theory of Monopoly Unionism," NBER Working Papers 0672, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0672
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w0672.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Harry G. Johnson & Peter Mieszkowski, 1970. "The Effects of Unionization on the Distribution of Income: A General Equilibrium Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(4), pages 539-561.
    2. Hall, Robert E & Lilien, David M, 1979. "Efficient Wage Bargains under Uncertain Supply and Demand," American Economic Review, American Economic Association, vol. 69(5), pages 868-879, December.
    3. 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.
    4. 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.
    5. Crawford, Vincent P, 1979. "On Compulsory-Arbitration Schemes," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 131-159, February.
    6. Carl M. Stevens, 1958. "On the Theory of Negotiation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(1), pages 77-97.
    7. 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.
    8. Jacob Mincer, 1981. "The Economics of Wage Floors," NBER Working Papers 0804, National Bureau of Economic Research, Inc.
    9. S. Rosen, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(2), pages 185-196.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andreas Hauptmann, 2019. "Endogenous wage regime selection: A general equilibrium model," Economics Bulletin, AccessEcon, vol. 39(4), pages 2650-2663.
    2. 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.
    3. 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.
    4. Giacomo Corneo, 1993. "Semi-unionized bargaining with endogenous membership and management opposition," Journal of Economics, Springer, vol. 57(2), pages 169-188, June.
    5. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    6. Robin Naylor, 1995. "Unions in Decline?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 22, pages 127-142.
    7. 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.
    8. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, vol. 14(5), pages 848-868, October.
    9. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.
    10. Steven G. Allen, 1987. "Declining Unionization in Construction: The Facts and the Reasons," NBER Working Papers 2320, National Bureau of Economic Research, Inc.
    11. 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.
    12. 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.
    13. 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.
    14. Edgar Preugschat, 2009. "Unionization Patterns and Firm Reallocation," 2009 Meeting Papers 1114, Society for Economic Dynamics.
    15. 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).
    16. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
    17. 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.
    18. 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.
    19. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    2. Henry S. Farber, 1984. "The Analysis of Union Behavior," NBER Working Papers 1502, National Bureau of Economic Research, Inc.
    3. Thomas Lemieux, 1993. "Unions and Wage Inequality in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 69-108, National Bureau of Economic Research, Inc.
    4. Uwe JIRJAHN & Stephen C. SMITH, 2018. "Nonunion Employee Representation: Theory And The German Experience With Mandated Works Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 201-233, March.
    5. Marselli, Riccardo & McCannon, Bryan C. & Vannini, Marco, 2015. "Bargaining in the shadow of arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 356-368.
    6. Uwe Jirjahn & Jens Mohrenweiser & Stephen C Smith, 2022. "Works councils and workplace health promotion in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(3), pages 1059-1094, August.
    7. Richard B. Freeman, 1985. "Unions, Pensions, and Union Pension Funds," NBER Chapters, in: Pensions, Labor, and Individual Choice, pages 89-122, National Bureau of Economic Research, Inc.
    8. Holzer, Harry J., 2008. "Living Wage Laws: How Much Do (Can) They Matter?," IZA Discussion Papers 3781, Institute of Labor Economics (IZA).
    9. Zafiris TZANNATOS & Toke S. AIDT, 2006. "Unions and microeconomic performance: A look at what matters for economists (and employers)," International Labour Review, International Labour Organization, vol. 145(4), pages 257-278, December.
    10. Peter Diamond, 2011. "Unemployment, Vacancies, Wages," American Economic Review, American Economic Association, vol. 101(4), pages 1045-1072, June.
    11. Suchin Virabhak & Wook Sohn, 2009. "The impact of Medicaid's preferred drug lists on physicians' prescribing behaviour," Applied Economics, Taylor & Francis Journals, vol. 41(21), pages 2705-2725.
    12. Richard B. Freeman, 1978. "The Effect of Trade Unionism on Fringe Benefits," NBER Working Papers 0292, National Bureau of Economic Research, Inc.
    13. Dinlersoz, Emin & Greenwood, Jeremy & Hyatt, Henry R., 2014. "Who Do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," IZA Discussion Papers 8416, Institute of Labor Economics (IZA).
    14. Knut Anton Mork & Robert E. Hall, 1980. "Energy Prices, Inflation, and Recession, 1974-1975," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 31-64.
    15. Nakakuki, Masayuki & Otani, Akira & Shiratsuka, Shigenori, 2004. "Distortions in Factor Markets and Structural Adjustments in the Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(2), pages 71-99, May.
    16. Blanchflower, David G. & Bryson, Alex, 2008. "Union Decline in Britain," IZA Discussion Papers 3436, Institute of Labor Economics (IZA).
    17. Ester Faia & Lorenza Rossi, 2013. "Union Power, Collective Bargaining, And Optimal Monetary Policy," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 408-427, January.
    18. Cameron W. Odgers & Julian R. Betts, 1997. "Do Unions Reduce Investment? Evidence from Canada," ILR Review, Cornell University, ILR School, vol. 51(1), pages 18-36, October.
    19. Jirjahn Uwe & Tsertsvadze Georgi, 2006. "Betriebsräte und Arbeitszufriedenheit / Works Councils and Job Satisfaction," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 537-561, October.
    20. Fallick, Bruce C & Hassett, Kevin A, 1999. "Investment and Union Certification," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 570-582, July.
    21. Bughin, Jacques & Vannini, Stefano, 1995. "Strategic direct investment under unionized oligopoly," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 127-145, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0672. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.