An Organizational Theory of Unionization

Anja Prummer and Francesco Squintani

No 19843, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Motivated by the recent surge in union drives, we present a theoretical model of the factors that influence unionization. An employee seeking to unionize their workplace assembles organizers to persuade coworkers to vote in favor. If unionization benefits workers, it is more likely to succeed when the organizers are credible. Credibility depends on the organizers not being overly biased and/or bearing significant orga- nizational costs. Our theory explains why grassroots movements, rather than estab- lished unions, often succeed in organizing workplaces. Interestingly, the likelihood of successful unionization, when it benefits workers, is non-monotonic with respect to organizational costs. When such costs are low, a firm that opposes unionization and targets organizers may paradoxically increase the chances of success. However, the unionization drive is ineffective if the firm’s opposition is sufficiently strong, as this makes organizational costs prohibitive.

Keywords: Unions; Campaigns (search for similar items in EconPapers)
JEL-codes: D23 D71 D83 (search for similar items in EconPapers)
Date: 2025-01
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