(Translated by https://www.hiragana.jp/)
What Determines Union Density? A Political Economy Model of the Labor Market with Empirical Evidence in the Context of European Countries
IDEAS home Printed from https://ideas.repec.org/a/bap/journl/170402.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

What Determines Union Density? A Political Economy Model of the Labor Market with Empirical Evidence in the Context of European Countries

Author

Listed:
  • Michael Ollinger

    (Universitat der Bundeswehr Munchen / Bundeswehr University Munich Institut fur Controlling, Finanz- und Risikomanagement, GERMANY)

  • Friedrich L. Sell

    (Universitat der Bundeswehr Munchen / Bundeswehr University Munich Institut fur Okonomie und Recht der globalen Wirtschaft, GERMANY)

Abstract

In this investigation, a political economy model of the labor market is proposed, where unions offer their (old and new) affiliates the combinations between the average real wage level and the standard deviation of wages or salaries. Globalization and other forces, however, have made it recently more difficult for the unions to pursue their policy in the backdrop of a declining union density. This has been established empirically for selected European countries. In an econometric exercise, we have also tested directly the impact of changes in real wages, minimum wage rate, and the effect of 90 to 10 decile ratio on the change in the degree of affiliation, which the unions were able to achieve in the recent past. We show empirically for a sample of European countries that unions can be either rewarded for their achievements or incentived to correct adverse developments in the labor market.

Suggested Citation

  • Michael Ollinger & Friedrich L. Sell, 2017. "What Determines Union Density? A Political Economy Model of the Labor Market with Empirical Evidence in the Context of European Countries," Review of Economics & Finance, Better Advances Press, Canada, vol. 10, pages 18-32, November.
    • Handle: RePEc:bap:journl:170402
    Note: The authors wish to thank Reinhard Neck, Thorvaldur Gylfason and the other participants of the session ¡°Economic Policy: Institutions, Political Economy, and Quantitative Economic Policy¡± as part of the 83rd International Atlantic Economic Conference, held in Berlin, March 22 through 25, 2017. We appreciate most valuable comments given by two anonymous referees.
    as

    Download full text from publisher

    File URL: http://www.bapress.ca/ref/ref-article/1923-7529-2017-04-18-15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonas Pontusson, 2013. "Unionization, Inequality and Redistribution," British Journal of Industrial Relations, London School of Economics, vol. 51(4), pages 797-825, December.
    2. Claus Schnabel & Joachim Wagner, 2007. "The Persistent Decline in Unionization in Western and Eastern Germany, 1980-2004 - What Can We Learn from a Decomposition Analysis?," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 14(2), pages 118-132.
    3. Booth, Alison L, 1984. "A Public Choice Model of Trade Union Behaviour and Membership," Economic Journal, Royal Economic Society, vol. 94(376), pages 883-898, December.
    4. Schnabel, Claus, 2012. "Union membership and density: Some (not so) stylized facts and challenges," Discussion Papers 81, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    5. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    6. David Card, 2001. "The Effect of Unions on Wage Inequality in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 54(2), pages 296-315, January.
    7. Schnabel, Claus, 2002. "Determinants of trade union membership," Discussion Papers 15, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    8. repec:bla:obuest:v:60:y:1998:i:4:p:509-28:a is not listed on IDEAS
    9. Brian D. Bell & Michael K. Pitt, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    10. Friedrich L. Sell, 2015. "The New Economics of Income Distribution," Books, Edward Elgar Publishing, number 15663.
    11. Stephen Machin, 2016. "Rising Wage Inequality, Real Wage Stagnation and Unions☆," Research in Labor Economics, in: Inequality: Causes and Consequences, volume 43, pages 329-354, Emerald Group Publishing Limited.
    12. David Fairris, 2003. "Unions and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 56(3), pages 481-497, April.
    13. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-291, April.
    14. Schnabel, Claus & Wagner, Joachim, 2003. "Determinants of Trade Union Membership in Western Germany: Evidence from Micro Data, 1980-2000," IZA Discussion Papers 708, Institute of Labor Economics (IZA).
    15. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2009. "The effect of globalization on union bargaining and price-cost margins of firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(1), pages 13-36, April.
    16. Stennek, Johan, 2015. "Why Unions Reduce Wage Inequality, II: The Relation between Solidarity and Unity," Working Papers in Economics 625, University of Gothenburg, Department of Economics.
    17. John Kelly, 2015. "Trade union membership and power in comparative perspective," The Economic and Labour Relations Review, , vol. 26(4), pages 526-544, December.
    18. Bell, Brian D & Pitt, Michael K, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    19. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    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. Friedrich L. Sell, 2021. "Flexibles Inflationsziel für die Geldpolitik: nur neuer Wein in alten Schläuchen? [Flexible Inflation Target for Monetary Policy]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(1), pages 58-62, January.
    2. Öllinger, Michael & Ostermair, Christoph & Sell, Friedrich L., 2019. "Distributional effects of minimum wages: Can unions expect a double dividend? A theoretical exercise from a supply-side view," Working Papers in Economics 2019,2, Bundeswehr University Munich, Economic Research Group.

    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. Sell, Friedrich L. & Öllinger, Michael, 2017. "Reward effects and incentive effects on the labor market: Empirical evidence for European countries," Working Papers in Economics 2017,2, Bundeswehr University Munich, Economic Research Group.
    2. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    3. Susan Hayter, 2015. "Unions and collective bargaining," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 4, pages 95-122, Edward Elgar Publishing.
    4. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    5. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2009. "Wage Dispersion in a Partially Unionized Labor Force," GEMF Working Papers 2009-09, GEMF, Faculty of Economics, University of Coimbra.
    6. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Kölling, Arnd, 2017. "Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. Much Ado about Nothing?," GLO Discussion Paper Series 24, Global Labor Organization (GLO).
    7. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2007. "The Impact of Deunionisation on Earnings Dispersion Revisited," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 337-363, Emerald Group Publishing Limited.
    8. Fitzenberger Bernd & Sommerfeld Katrin, 2016. "A Sequential Decomposition of the Drop in Collective Bargaining Coverage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 37-69, February.
    9. Donna Brown & Peter Ingram & Jonathan Wadsworth, 2004. "Everyone's A Winner? Union Effects on Persistence in Private Sector Wage Settlements: Longitudinal Evidence from Britain," School of Economics Discussion Papers 1104, School of Economics, University of Surrey.
    10. Albert Jan Hummel & Bas Jacobs, 2018. "Optimal Income Taxation in Unionized Labor Markets," Tinbergen Institute Discussion Papers 18-064/VI, Tinbergen Institute.
    11. Hummel, Albert Jan & Jacobs, Bas, 2023. "Optimal income taxation in unionized labor markets," Journal of Public Economics, Elsevier, vol. 220(C).
    12. David Card & Thomas Lemieux & W. Craig Riddell, 2020. "Unions and wage inequality: The roles of gender, skill and public sector employment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 140-173, February.
    13. Fei Peng & Lili Kang, 2013. "Labor Market Institutions and Skill Premiums: An Empirical Analysis on the UK, 1972-2002," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 959-982.
    14. Schnabel Claus & Wagner Joachim, 2008. "The Aging of the Unions in West Germany, 1980–2006," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(5-6), pages 497-511, October.
    15. Fernando Rios-Avila & Barry T. Hirsch, 2014. "Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 1-27, January.
    16. Blanchflower, David G., 2006. "A Cross-Country Study of Union Membership," IZA Discussion Papers 2016, Institute of Labor Economics (IZA).
    17. David Card & Thomas Lemieux & W. Craig Riddell, 2003. "Unionization and Wage Inequality: A Comparative Study of the U.S, the U.K., and Canada," NBER Working Papers 9473, National Bureau of Economic Research, Inc.
    18. Cardoso, Ana Rute & Portugal, Pedro, 2003. "Bargained Wages, Wage Drift and the Design of the Wage Setting System," IZA Discussion Papers 914, Institute of Labor Economics (IZA).
    19. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    20. Julien Picault, 2013. "Unionization and Labour-market Discrimination: A Closer Look at Non-unionized Workers," LABOUR, CEIS, vol. 27(3), pages 272-287, September.

    More about this item

    Keywords

    Political Economy of the labor market; Union density; Wage dispersion; Average wage; Minimum wage;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    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:bap:journl:170402. 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: Carlson (email available below). General contact details of provider: http://www.bapress.ca .

    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.