Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/156262
Authors: 
de Pinto, Marco
Lingens, Jörg
Year of Publication: 
2017
Series/Report no.: 
IAAEU Discussion Paper Series in Economics 01/2017
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 relatively 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.
Subjects: 
unionization costs
endogenous unionization
firm-selection
welfare
wage inequality
JEL: 
J51
L11
L16
Document Type: 
Working Paper

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