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Notes on the Economics of Labor Unions

Author

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  • Henry S. Farber

    (Princeton University)

Abstract

A common definition of a labor union is that it is an association of workers who bargain collectively with their employer regarding the terms and conditions of employment. Economic analysis of labor unions falls largely into four related categories: 1) unions as maximizing agents, 2) dispute resolution: strikes and arbitration, 3) the effect of unions on wages, and 4) the determination of union membership. This essay is organized around discussions of these topics.

Suggested Citation

  • Henry S. Farber, 2001. "Notes on the Economics of Labor Unions," Working Papers 831, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:452
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    References listed on IDEAS

    as
    1. Richard B. Freeman, 1980. "The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits, and Separations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 643-673.
    2. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(4), pages 819-844, July.
    3. Farber, Henry S, 1990. "The Decline of Unionization in the United States: What Can Be Learned from Recent Experience," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 75-105, January.
    4. Ashenfelter, Orley, et al, 1992. "An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems," Econometrica, Econometric Society, vol. 60(6), pages 1407-1433, November.
    5. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
    6. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
    7. Farber, Henry S., 1983. "The Determination of the Union Status of Workers," The Warwick Economics Research Paper Series (TWERPS) 227, University of Warwick, Department of Economics.
    8. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    9. Henry S. Farber, 1980. "An Analysis of Final-Offer Arbitration," Journal of Conflict Resolution, Peace Science Society (International), vol. 24(4), pages 683-705, December.
    10. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
    11. Farber, Henry S & Saks, Daniel H, 1980. "Why Workers Want Unions: The Role of Relative Wages and Job Characteristics," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 349-369, April.
    12. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-344, October.
    13. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-1181, December.
    14. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-942, October.
    15. Farber, Henry S, 1983. "The Determination of the Union Status of Workers," Econometrica, Econometric Society, vol. 51(5), pages 1417-1437, September.
    16. Ashenfelter, Orley & Johnson, George E, 1969. "Bargaining Theory, Trade Unions, and Industrial Strike Activity," American Economic Review, American Economic Association, vol. 59(1), pages 35-49, March.
    17. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 3-39, June.
    18. Farrell E. Bloch & Mark S. Kuskin, 1978. "Unions and Wages: Wage Determination in the Union and Nonunion Sectors," ILR Review, Cornell University, ILR School, vol. 31(2), pages 183-192, January.
    19. 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.
    20. Richard B. Freeman, 1980. "The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits," NBER Working Papers 0242, National Bureau of Economic Research, Inc.
    21. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
    22. Henry S. Farber & Harry C. Katz, 1979. "Interest Arbitration, Outcomes, and the Incentive to Bargain," ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
    23. Farber, Henry S & Bazerman, Max H, 1986. "The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration," Econometrica, Econometric Society, vol. 54(6), pages 1503-1528, November.
    24. Farber, Henry S, 1978. "Bargaining Theory, Wage Outcomes, and the Occurrence of Strikes: An Econometric Analysis," American Economic Review, American Economic Association, vol. 68(3), pages 262-271, June.
    25. Henry S. Farber, 1981. "Splitting-the-Difference in Interest Arbitration," ILR Review, Cornell University, ILR School, vol. 35(1), pages 70-77, October.
    26. Freeman, Richard B & Medoff, James L, 1981. "The Impact of the Percentage Organized on Union and Nonunion Wages," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 561-572, November.
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    Citations

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    Cited by:

    1. David G. Blanchflower & Alex Bryson, 2010. "The Wage Impact of Trade Unions in the UK Public and Private Sectors," Economica, London School of Economics and Political Science, vol. 77(305), pages 92-109, January.
    2. James Bishop & Iris Chan, 2019. "Is Declining Union Membership Contributing to Low Wages Growth?," RBA Annual Conference Papers acp2019-06, Reserve Bank of Australia.
    3. Alex Bryson & Lorenzo Cappellari & Claudio Lucifora, 2004. "Does Union Membership Really Reduce Job Satisfaction?," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 439-459, September.
    4. Bryson, Alex & Gomez, Rafael, 2003. "Why have workers stopped joining unions?," LSE Research Online Documents on Economics 20022, London School of Economics and Political Science, LSE Library.
    5. Alex Bryson & Lorenzo Cappellari & Claudio Lucifora, 2010. "Why So Unhappy? The Effects of Unionization on Job Satisfaction," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 357-380, June.
    6. Stefan Oliver Houpt & Juan Carlos Rojo Cagigal, 2014. "Relative deprivation and labour conflict during Spain’s industrialization: the Bilbao estuary, 1914–1936," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 8(3), pages 335-369, September.
    7. Mark Gius, 2012. "The Effects of District-Level Union Status on the Job Satisfaction of Teachers," The Economic and Labour Relations Review, , vol. 23(4), pages 79-90, November.
    8. David G. Blanchflower & Alex Bryson, 2003. "What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?," NBER Working Papers 9973, National Bureau of Economic Research, Inc.
    9. Alex Bryson & Rafael Gomez, 2005. "Why Have Workers Stopped Joining Unions? The Rise in Never‐Membership in Britain," British Journal of Industrial Relations, London School of Economics, vol. 43(1), pages 67-92, March.

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    More about this item

    Keywords

    labor unions; dispute resolution; strikes; union growth;
    All these keywords.

    JEL classification:

    • P0 - Political Economy and Comparative Economic Systems - - General
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies

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