Labor Unions and the Adoption of New Technology

Yair Tauman () and Yoram Weiss

Journal of Labor Economics, 1987, vol. 5, issue 4, 477-501

Abstract: This paper examines whether unionization by workers discourages the adoption of labor-saving techniques. This is done in the context of an oligopolistic industry with a small number of firms, s ome of which are unionized. The authors find that unionization can ac tually encourage the adoption of labor-saving technology, provided th at the technological improvement is mild and that demand is sufficien tly high (or demand elasticity sufficiently low). If there is an effe ctive threat of entry that causes the union to moderate its wage dema nds, then unionization may encourage the adoption of new technology e ven at low levels of demand. Copyright 1987 by University of Chicago Press.

Date: 1987
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