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Title:Risk aversion and trade union membership PDF Logo
Authors:Goerke, Laszlo
Pannenberg, Markus
Issue Date:2008
Series/Report no.:Discussion papers // German Institute for Economic Research 770
Abstract:In an open-shop model of trade union membership with heterogeneity in risk attitudes, a worker's relative risk aversion can affect the decision to join a trade union. Furthermore, a shift in risk attitudes can alter collective bargaining outcomes. Using German panel data (GSOEP) and three novel direct measures of individual risk aversion, we find evidence of a significantly positive relationship between risk aversion and the likelihood of union membership. Additionally, we observe a negative correlation between bargained wages in aggregate and average risk preferences of union members. Our results suggest that an overall increase in risk aversion contributes to wage moderation and promotes employment.
Subjects:employment
membership
risk aversion
trade union
JEL:J51
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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