Taxes on labour and unemployment in a shirking model with union bargaining

This paper studies the impact of a cut in labour taxes in a model that combines two explanations for equilibrium unemployment: employee shirking and union bargaining. It is shown that if the ratio of unemployment compensation to the net-of-tax wages is kept fixed, a tax cut leads to higher unemployment. When the unemployment benefits are fixed in real terms, the effect of a tax cut on unemployment is ambiguous. Adverse employment effects are ruled out if unions are powerless or the labour share is constant.     

The importance of national institutional arrangements: the case of trade union membership and unemployment

In some EU countries the trade unions are centrally involved in the administration and distribution of unemployment benefits. This institutional relationship is held to play an important role in accounting for the relatively high level of union density in the countries concerned. However, there has been very little systematic, empirical research designed to demonstrate this alleged effect. This paper analyses a large-scale body of survey data for all the EU countries in 1993 to test for this effect, with the results strongly confirming the role and strength of this institutional relationship.     

The changing union and bargaining landscape: union concentration and collective bargaining trends

Unions in Western Europe have tended to merge in larger organisations, straddling across traditional bargaining demarcations. Despite the trend towards union concentration, cross‐national differences remain in the degree of fragmentation and the balance across private and public sectors. In the past years, wage moderation was common to nearly all bargaining systems, partly as a result of coordinated incomes policies or pattern‐setting wage settlements. Tripartite concertation has proven more difficult because of increased dissatisfaction with modest pay increases and insufficient employment effects.     

Wage curve, unemployment duration and compensating differentials

In this study unemployment effects on individual pay are investigated following the study on ‘wage curves’ by Blanchflower and Oswald (1990). In bargaining models, higher unemployment should lower wage pressure; due to compensating wage differential arguments, on the other hand, workers who take jobs with higher layoff risks should be rewarded. In a cross-sectional study on Austrian data, a negative wage curve is confirmed. Contrary to the results by Blanchflower and Oswald no U-shape is found, also long-term unemployment seems to be important. No conclusive evidence of compensating differentials has been determined.     

Trade union membership and dismissals

In Germany, there is no trade union membership wage premium and a membership fee of 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union membership which has hitherto not been documented: in Western Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we are able to show that roughly 50% of the observed raw differential in individual dismissal rates can be explained by the estimated average partial effect of union membership.     

Wage bargaining,productivity growth and long-run industry structure

This paper studies the innovation dynamics of an oligopolistic industry. The firms compete not only in the output market but also by engaging in productivity enhancing innovations to reduce labor costs. Rent sharing may generate productivity dependent wage differentials. Productivity growth creates intertemporal spillover effects, which affect the incentives for innovation at subsequent dates. Over time the industry equilibrium approaches a steady state. The paper characterizes the evolution of the industry's innovation behavior and its market structure on the adjustment path.     

Political attitudes,participation and union membership in the UK

Unionisation continues to decline in the UK. This paper examines the changes over time in the relationship between politics and union membership, and it is based on European Social Survey data from 2002 to 2018. Political attitudes have been analysed by considering the interest in politics and ideological orientation according to self-placement on the left–right scale, and behaviour looking at political participation. Political orientation (being left-wing) and political participation are determinants of union membership. However, in the UK, a centrist political orientation prevails, and political participation is low. The relationship between political attitudes, behaviour and unionisation over time has been stable.     

Workplace bargaining and trade union power

Frans Leijnse argues that although workplace bargaining in Britain has made substantial inroads into management control on the shop floor, there has been a striking failure by the unions to protect members against unemployment and inflation. He explains this in terms of the trade unions' existing lack of the organisational means to transfer the power they have won from the shopfloor to higher levels.     

The unemployed and trade union membership

During the 1980s it has been the unions’ policy to organise and represent the unemployed. This article analyses why members have or have not retained their membership on becoming unemployed. A main finding is that unions are not perceived as catering for the unemployed. Union influence over the member's future employment may nevertheless encourage retention.     

Time dependency of trade union membership

Event-history analysis is used to model the time dependency of two decisions: the decision to join a trade union, and the decision to leave a trade union. We formulate two hypotheses with regard to these two decisions and parametric regression models are used to investigate these hypotheses. The process of joining a trade union can be described by a decreasing rate, using a Weibull. For the process of leaving a trade union, we suggest an increasing rate that decreases after several years, a process best described by a log-logistic model.     

Unemployment insurance and the distribution of unemployment spells

In this paper administrative data from the unemployment-insurance (UI) system are used to examine the distribution of unemployment spells. Hazard plots of the data reveal a strong clustering around the benefit exhaustion point. In addition, estimation of the effects of the exhaustion point and of the UI benefit level on spell lengths obtained with a non-parametric proportional-hazards model - estimated by direct maximization of the general likelihood function - shows significant effects of both. However, the effect of the exhaustion point on the hazard is not proportional, making detection of its effect somewhat difficult.     

The determinants of Australian trade union membership

This paper investigates the determinants of trade union membership in Australia using the Engle and Granger (1987) theory of co-integrated economic variables. Applying the theory of co-integration yields a model of union membership which can be interpreted as distinguishing between long-run and ‘business cycle’ determinants of union membership. The principal long-run determinant of union membership is found to be the level of employment disaggregated by industry classification. Business cycle variables—the real wage and the change in unemployment—are also shown to influence movements in union density. These findings are consistent with recent studies which have attributed the decline in union membership in Australia since the early 1980s to the changing composition of employment and movements in the rate of unemployment.     

Wage determination in the union and nonunion sectors.

This study contains estimates of wage equations for white male union and nonunion employees. The authors find that nonunion wages are generally more responsive than union wages to individuals' education and experience and to regional price-level variation. Despite those differences, however, estimates of union-nonunion wage differentials based on these separate equations do not differ greatly from a differential obtained from a union dummy variable in an equation based on combined union and nonunion observations. Union-nonunion differentials vary widely across occupational groups and are generally larger in the lower skilled and more highly unionized occupations. The results for manufacturing, for which additional industry data are available, indicate a negative impact of high concentration ratios on the wages of all workers and a greater impact of establishment size on nonunion than on union wages. Data were drawn from the May 1973 Current Population Survey.     

Wage bargaining as an optimal control problem: a dynamic version of the efficient bargaining model

Decisions in Economics and Finance - In this paper, I develop a dynamic version of the efficient bargaining model grounded on optimal control in which a firm and a union bargain over the wage in a...     

Search frictions,real wage rigidities and the optimal design of unemployment insurance

In this paper, we study the optimal unemployment benefits financing scheme when the economy is subject to labor market imperfections characterized by real wage rigidities and search frictions. The US unemployment insurance financing is such that firms are taxed proportionately to their layoffs to finance unemployment benefits. Using DSGE methodology, we investigate how policy instruments should interact with labor market imperfections. It is shown that wage rigidities in a search and matching environment cause welfare costs, especially in the absence of an incentive-based unemployment insurance. This cost is mainly due to the distorting effect of wage rigidities which generate inefficient separations. We show that the optimal unemployment benefits financing scheme – corresponding to the Ramsey policy – offsets labor market imperfections and allows implementation of the Pareto allocation. The second-best allocation brings the economy close to the Ramsey allocation. The implementation of the optimal policies clearly highlights the role of labor market institutions for short-run stabilization.     

The measurement of trade union membership in Ireland and the UK

The interwoven history and development of unions in the UK and Ireland has produced statistics which cause acute problems of comparability. Here the author attempts to clarify the situation with discussion of information sources available on unions and their membership in the two countries.     

Privatisation,trade union strength and bargaining power in Nigeria's finance and petroleum sectors

This article compares the consequences of privatisation for collective bargaining, trade union membership size and bargaining power within two economic sectors. The results indicate that privatisation has significant impact on industrial relations, and that this impact is mediated by other factors, with variations within and between sectors.     

Unemployment duration and the interactions between unemployment insurance and social assistance

Existing studies suggest that reforms that reduce the generosity of the unemployment benefits should lower unemployment. Despite the large number of such reforms implemented in Europe in the past decades, evidence from various data sources shows very little correlation with the evolution of unemployment. This paper suggests that the scant success of these labour market reforms can be explained by the interactions between unemployment insurance and other social assistance programmes. Evidence from the European Community Household Panel shows that recipients of unemployment insurance who are also eligible for other welfare schemes are indeed less sensitive to changes in the level and the duration of their benefits.     

The impact of unemployment insurance taxes on wages

This paper examines the incidence of state unemployment insurance taxes on wages paid to workers in various demographic groups. The empirical work matches state level measures of unemployment insurance tax and benefit variables to data aggregated from the Current Population Survey on worker earnings for the period 1992 to 2002. Econometric evidence presented in the paper supports the paper's main hypothesis that UI tax rate structure has its greatest adverse impact on less mobile workers (prime age married women and young workers) and little impact on more mobile workers (prime age men).