EconPapers    
Economics at your fingertips  
 

The Impact of Unionization Costs when Firm-selection Matters

Marco de Pinto () and Jörg Lingens
Additional contact information
Marco de Pinto: Institute for Labour Law and Industrial Relations in the EU, Trier University
Jörg Lingens: University of Muenster

No 201701, IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU)

Abstract: How does an increase in unionization costs, i.e. costs which arise when workers are organized by a union, affect the productivity distribution of active firms, wage inequality and welfare? In this paper, we build a model with costly, endogenous unionization, heterogeneous firms as well as free market entry/exit. If unionization costs are rel- atively low (high), we find that an increase in these costs decreases (increases) average productivity and welfare decreases (increases). Additionally, we find a hump-shaped relationship between unionization costs and wage inequality. These results suggest that policies aiming to reduce unionization could worsen economic performance.

Keywords: unionization costs; endogenous unionization; firm-selection; welfare; wage inequality (search for similar items in EconPapers)
JEL-codes: J51 L11 L16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2017-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://iaaeg.de/images/DiscussionPaper/2017_01.pdf First version, 2017 (application/pdf)

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:iaa:dpaper:201701

Access Statistics for this paper

More papers in IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU) Contact information at EDIRC.
Bibliographic data for series maintained by Adrian Chadi ().

 
Page updated 2019-10-09
Handle: RePEc:iaa:dpaper:201701