Semi-unionized bargaining with endogenous membership and management opposition

This paper develops a model of open shop unions and efficient bargain, in which there is a social custom to unionize and the firms can pay wage premiums to dissuade union membership. If firms actively oppose unions, the union density turns out to be affected by changes of the product price and the reservation wage, and it is not always positively correlated with the workers' income share. Moreover, the model provides a rationale for higher union density in centralized as opposed to decentralized bargaining systems.I would like to thank Robert Boyer, Hans Peter Grüner, Roger Guesnerie, and two referees for helpful comments and suggestions. All remaining errors are mine. Financial support from the Commission of the European Communities (SPES-915028) is gratefully acknowledged.