Risk Aversion and Trade-Union Membership

21 Pages Posted: 16 May 2012

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 3 versions of this paper

Date Written: June 2012

Abstract

If trade unions provide only their members with insurance against income variations, as a private good, this insurance will provide a stronger incentive for more risk‐averse employees to become union members. Using data from the German Socio‐Economic Panel (SOEP) and various direct measures of individual risk attitudes, we find robust evidence of a positive relationship between risk aversion and the likelihood of union membership for full‐time employees. This association is particularly strong for males and in West Germany.

Keywords: Risk preferences, survey data, trade unions

JEL Classification: J51

Suggested Citation

Goerke, Laszlo and Pannenberg, Markus, Risk Aversion and Trade-Union Membership (June 2012). The Scandinavian Journal of Economics, Vol. 114, Issue 2, pp. 275-295, 2012, Available at SSRN: https://ssrn.com/abstract=2060816 or http://dx.doi.org/10.1111/j.1467-9442.2012.01694.x

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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