Labour union, entry and consumer welfare

Arijit Mukherjee and Leonard F.S. Wang

Economics Letters, 2013, vol. 120, issue 3, 603-605

Abstract: It is usually believed that the presence of a labour union makes firms as well as consumers worse off by increasing wages compared to the situation with no labour union. We show that the presence of a labour union may increase the incentive for entry and may also make consumers better off compared to the situation with no labour union if the labour productivity of the entrant is sufficiently higher to that of the incumbent.

Keywords: Entry; Labour union; Consumer surplus (search for similar items in EconPapers)
JEL-codes: F12 L13 L40 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:603-605

DOI: 10.1016/j.econlet.2013.06.032

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