Trade Union Membership and Dismissals

34 Pages Posted: 8 Oct 2010

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Markus Pannenberg

University of Applied Sciences Bielefeld - Department of Business and Economics; DIW Berlin - GSOEP; Institute for the Study of Labor (IZA), Bonn

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2010

Abstract

In Germany, there is no trade union membership wage premium, while the membership fee amounts to 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 West Germany, union members are less likely to lose their jobs than non-members. In particular, using data from the German Socio-Economic Panel we can 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.

Keywords: dismissal, free-riding, trade union membership, survey data

JEL Classification: C23, H41, J51, J63

Suggested Citation

Goerke, Laszlo and Pannenberg, Markus, Trade Union Membership and Dismissals (September 30, 2010). CESifo Working Paper Series No. 3196, Available at SSRN: https://ssrn.com/abstract=1688251

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

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Markus Pannenberg

University of Applied Sciences Bielefeld - Department of Business and Economics ( email )

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