TITLE:
Union Membership and Employment Dynamics: The Role of the Union Objective Function
AUTHORS:
Marcus Dittrich
KEYWORDS:
Unions, Employment Dynamics, Union Membership, Union Objective Function
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.5,
June
19,
2019
ABSTRACT: This paper studies the behaviour of a labour union
in a model with employment and membership dynamics. It is known from the
literature that the relative level of employment between intertemporal and
static union models is affected by the structure of the union density function.
We show that this result does not hold in general but rather that it depends on
the union objective function. If the union maximises the wage bill of their
members, employment in the intertemporal model will differ from employment in
the static model depending on the union density function. However, if the union
maximises the rent from unionisation, the intertemporal model will yield the
same level of employment as the static model regardless of the union density.