Employer Behavior when Workers Can Unionize

U. Carlos III Bus. Econ. Working Paper No. 02-08 (3)

40 Pages Posted: 20 Mar 2002

Date Written: March 2002

Abstract

Unionization imposes substantial costs on employers. This paper develops a model that recognizes that, as a result, employers will set wages and employment taking into account the effect of their decisions on workers' incentives to organize. This model of employer behavior allows us to address two questions jointly: What determines which firms become unionized? And what are the consequences of unionization for employment and wages in nonunion firms? The implications of the model depart significantly from those of previous work, which either ignored employers' strategic behavior, or treated these questions in isolation.

Keywords: Employment determination, Wage determination, Unions, Union threat, Wage differentials

JEL Classification: J51, J23, J31, J41, D82, M50

Suggested Citation

Ruiz-Verdú, Pablo, Employer Behavior when Workers Can Unionize (March 2002). U. Carlos III Bus. Econ. Working Paper No. 02-08 (3), Available at SSRN: https://ssrn.com/abstract=304059 or http://dx.doi.org/10.2139/ssrn.304059

Pablo Ruiz-Verdú (Contact Author)

Universidad Carlos III de Madrid ( email )

Calle Madrid 126
Getafe, Madrid 28903
Spain
+34 91 624 5801 (Phone)
+34 91 624 9607 (Fax)

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