A Biological Model of Unions

58 Pages Posted: 1 May 2001 Last revised: 21 Oct 2010

See all articles by Michael Kremer

Michael Kremer

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development; Harvard University - Harvard Kennedy School (HKS)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Date Written: April 2001

Abstract

This paper applies principles from evolutionary biology to the study of unions. We show that unions which maximize the present discounted wages of current members will be displaced in evolutionary competition by unions with more moderate wage policies that allow their firms to live longer. This suggests that unions with constitutional incumbency advantages that allow leaders to moderate members' wage demands may have a selective advantage. The model also suggests that industries with high turnover of firms will have low unionization rates, and that there may be one equilibrium with high unionization and long-lived firms and another with low unionization and short-lived firms. These predictions seem broadly consistent with the data.

Suggested Citation

Kremer, Michael R. and Olken, Benjamin A., A Biological Model of Unions (April 2001). NBER Working Paper No. w8257. Available at SSRN: https://ssrn.com/abstract=268372

Michael R. Kremer (Contact Author)

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