Why Unions Reduce Wage Inequality: A Theory of Domino Effects
Johan Stennek
Scandinavian Journal of Economics, 2020, vol. 122, issue 3, 1045-1072
Abstract:
Numerous empirical studies show that unions reduce wage differences. I demonstrate that their motive might be a mix of fairness and strategy, maximizing the use of union bargaining power in the presence of efficiency wages. Unions can push primarily for raising the lowest wages, and still not sacrifice higher wages much, if the employers themselves increase higher wages to protect efficiency‐enhancing wage differences. If these “domino effects” are strong enough, then an egalitarian wage policy might even increase the median wage.
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://doi.org/10.1111/sjoe.12357
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:122:y:2020:i:3:p:1045-1072
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520
Access Statistics for this article
Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten
More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().