Why Unions Survive: Understanding How Unions Overcome The Free-Rider Problem / Richard Murphy.

By:

Murphy, Richard

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25924.Publication details: Cambridge, Mass. National Bureau of Economic Research 2019.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper provides evidence for why individuals join unions instead of free-riding. I model membership as legal insurance. To test the model, I use the incidence of news stories concerning allegations against teachers in the UK as a plausibly exogenous shock to demand for such insurance. I find that, for every five stories occurring in a region, teachers are 2.2 percentage points more likely to be members in the subsequent year. These effects are larger when teachers share characteristics with the news story and can explain 45 percent of the growth in teacher union membership between 1992 and 2010.

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Previous	nber w25921 International Student Mobility: Growth and Dispersion /	nber w25922 Employee Costs of Corporate Bankruptcy /	nber w25923 Good Dispersion, Bad Dispersion /	nber w25924 Why Unions Survive: Understanding How Unions Overcome The Free-Rider Problem /	nber w25925 The Political Economy Consequences of China's Export Slowdown /	nber w25926 Should We Trust Clustered Standard Errors? A Comparison with Randomization-Based Methods /	nber w25927 Does Trade Reform Promote Economic Growth? A Review of Recent Evidence /	Next

June 2019.

This paper provides evidence for why individuals join unions instead of free-riding. I model membership as legal insurance. To test the model, I use the incidence of news stories concerning allegations against teachers in the UK as a plausibly exogenous shock to demand for such insurance. I find that, for every five stories occurring in a region, teachers are 2.2 percentage points more likely to be members in the subsequent year. These effects are larger when teachers share characteristics with the news story and can explain 45 percent of the growth in teacher union membership between 1992 and 2010.