Firms' Rents, Workers' Bargaining Power and the Union Wage Premium

Thomas Breda ()

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Abstract: This article identifies the wage premium associated with firm-level union recognition in France. An average premium of 2% is found despite the fact that most workers are already covered by industry-level agreements. To explore the origin of the premium, I construct a simple bargaining model from which I derive three predictions, which are tested empirically using matched employer–employee data. The main prediction is that if intra-firm bargaining is behind the union wage premium, the latter increases with the amount of quasi-rents available in the firms that unions organise. This prediction is validated empirically when firms' market shares are used as a proxy for their rents.

Keywords: Firms'Rents (search for similar items in EconPapers)
Date: 2015-12
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Citations: View citations in EconPapers (13)

Published in The Economic Journal, 2015, 125 (589), pp.1616-1652. ⟨10.1111/ecoj.12198⟩

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Working Paper: Firms' Rents, Workers' Bargaining Power and the Union Wage Premium (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01307709

DOI: 10.1111/ecoj.12198

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