How Trade Unions Increase Welfare
Gutenberg School of Management and Economics Discussion Paper No. 1010
26 Pages Posted: 10 Sep 2010
Date Written: August 19, 2010
Historically, worker movements have played a crucial role in making workplaces safer. Firms traditionally oppose better health standards. According to our interpretation, workplace safety is costly for firms but increases average health of workers and thereby aggregate labour supply. A laissez-faire approach in which firms set safety standards is suboptimal as workers are not fully informed of health risks associated with jobs. Safety standards set by better-informed trade unions are output and welfare increasing.
Keywords: occupational health and safety, trade unions, welfare
JEL Classification: J51, J81
Suggested Citation: Suggested Citation