An organizational theory of unionization

Anja Prummer and Francesco Squintani

No 2026/24, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: Motivated by union endeavors in the United States, we present a first theoretical model of unionization, succinctly capturing the regulations governing the unionization process. We argue that unionization in the U.S. is essentially an informational problem: workers must vote on whether to unionize without knowing the benefits and costs ex ante. If unionization benefits workers, we show that campaigns are more likely to succeed when organizers are credible. Credibility depends on organizers not being excessively pro-union and on their bearing organizational costs. Hence, we explain why grassroots action is often more effective at unionizing workplaces than professional campaigning. We find that the likelihood of unionization is non-monotonic in organizational costs: when such costs are low, firms that target organizers may unintentionally increase the likelihood of unionization. More broadly, our paper contributes to the underdeveloped study of political organization design by showing how organizer selection and incentives shape unionization outcomes.

Keywords: Unions; Labor Organization; Campaigns (search for similar items in EconPapers)
JEL-codes: D23 D71 D83 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:344212

DOI: 10.17169/refubium-54034

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