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Open-shop unions and product market competition

Paulo Bastos (), Udo Kreickemeier () and Peter Wright ()

Canadian Journal of Economics, 2010, vol. 43, issue 2, 640-662

Abstract: Evidence on the effect of product market competition on unionized wages is mixed. In this paper we show theoretically that the result may reflect genuine heterogeneity in the response of union wages to product market conditions. For low levels of unionization, union bargaining power may actually be enhanced by market competition, as firms have more to lose when there is a strike. Using recent data from the UK, we explore interactions between the level of industry competition and unionization, and find supporting evidence for this hypothesis.

JEL-codes: J51 J52 L13 (search for similar items in EconPapers)
Date: 2010
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Handle: RePEc:cje:issued:v:43:y:2010:i:2:p:640-662