Article ID Journal Published Year Pages File Type
5068094 European Journal of Political Economy 2014 15 Pages PDF
Abstract

•We build an expressive model of strikes with unfairness as voting motivation.•Larger unions lead to more expressiveness and higher wage offers and more strikes.•Empirical support is provided using UK survey data.

The conventional explanation for strikes is that they are caused by an asymmetry of information about the profitability of the firm - union members are uninformed whereas management are informed. Instead, this paper builds a model of strikes where a perception of unfairness provides an expressive benefit to vote for a strike. The asymmetry of information is now reversed such that management are uninformed about the emotionality of union members. The model predicts that larger union size increases both wage offers and the incidence of strikes. An empirical test using UK data provides support for the predictions. In particular, union size is positively correlated with the incidence of strikes and other industrial actions, even when asymmetric information regarding profitability is controlled for.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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