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The Rise and Fall of Unionised Labour Markets: A Political Economy Approach (2005)
| Venue: | Economic Journal |
| Citations: | 4 - 0 self |
BibTeX
@ARTICLE{Lee05therise,
author = {Woojin Lee and John E. Roemer},
title = {The Rise and Fall of Unionised Labour Markets: A Political Economy Approach},
journal = {Economic Journal},
year = {2005},
pages = {1--40}
}
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Abstract
Studying a model where trade unions interact with endogenously formed partisan political parties, we explain changing political preferences for and against the unionised labour market regime. We focus on the changes in coalition formation between unskilled and moderately skilled workers, which in turn depend on inequality among workers. When inequality is either very low or very high, moderately skilled workers form a political coalition with unskilled workers to support a unionised labour market regime. In other cases, the economic interest of the moderately skilled workers is more in line with that of highly skilled workers and capital owners to support a competitive labour market regime. Different societies have different labour market regimes or wage determination mechanisms. Some, such as the US, have relatively unregulated labour markets, while others, such as the Northern European countries, have strong trade unions, where wages are set by a collective bargaining procedure mediated through the unions. As Table 1 shows, union density in 1990 ranged over almost the entire spectrum, from 93.7 % in Sweden to 9.3 % in France. Union coverage, defined as the proportion of wage and salary workers covered by terms of a collective bar-
Keyphrases
skilled worker political economy approach unionised labour market unionised labour market regime partisan political party salary worker competitive labour market regime collective bargaining procedure coalition formation trade union political preference unskilled worker union density wage determination mechanism entire spectrum different society political coalition economic interest unregulated labour market union coverage strong trade union capital owner collective bar northern european country different labour market
