Product Market Competition and Trade Union Structure

Tinbergen Institute Working Paper No. 2003-005/1

17 Pages Posted: 3 Mar 2003

See all articles by Klaas J. Beniers

Klaas J. Beniers

Tinbergen Institute, Erasmus University Rotterdam

Robert Dur

Erasmus University Rotterdam (EUR) - Department of Economics; Tinbergen Institute; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: January 2003

Abstract

Trade unions tend to reduce the dispersion of wages among their members. Skilled workers may therefore have an incentive to separate from an encompassing union and organize into a separate craft union. In this paper, we examine a theoretical model to gain insight into the determinants of the number of trade unions at a firm. We show that imperfect competition in the product market may drive skilled and unskilled workers together, even though unskilled workers use their political power in the trade union to extract rents from the skilled workers. Additionally, we examine the influence of several features of production technology on trade union structure.

Keywords: product market competition, trade union structure, wage dispersion

JEL Classification: J31, J51

Suggested Citation

Beniers, Klaas J. and Dur, Robert, Product Market Competition and Trade Union Structure (January 2003). Tinbergen Institute Working Paper No. 2003-005/1, Available at SSRN: https://ssrn.com/abstract=367981 or http://dx.doi.org/10.2139/ssrn.367981

Klaas J. Beniers (Contact Author)

Tinbergen Institute, Erasmus University Rotterdam ( email )

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Robert Dur

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

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