The Analysis of Union Behavior

80 Pages Posted: 25 May 2006 Last revised: 11 Aug 2022

See all articles by Henry S. Farber

Henry S. Farber

Princeton University; National Bureau of Economic Research (NBER)

Date Written: November 1984

Abstract

There is now a substantial body of economic research that models the behavior of labor unions as maximization of a well defined objective function. This paper presents both a selective critical survey of this literature and a preliminary consideration of some important problems that have not been addressed in the literature to date. Particular emphasis is on work that is operational in the sense that it has an empirical component or is amenable to empirical implementation. Topics surveyed include 1) the general economic modus operandi of labor unions in the U.S. economy; 2) the structure of bargaining and the efficiency of labor contracts; 3) the bargaining process as it relates to the identification of union objectives; and 4) empirical studies of union objectives. While much is learned from the existing literature, it is argued that amore general political/ economic model of union behavior is needed. This model would derive the objective function of the union in a consistent fashion from the preferences of the workers and union leaders through a well defined political process. Three important issues that are central to the development of such a model are addressed: 1) The determination of the size of the union and the rules used for the allocation of scarce union jobs;. 2) the aggregation of preferences when workers are heterogeneous; and 3) the union leadership asan entity capable of pursuing its own goals.

Suggested Citation

Farber, Henry S., The Analysis of Union Behavior (November 1984). NBER Working Paper No. w1502, Available at SSRN: https://ssrn.com/abstract=336268

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