Firms' Rents, Workers' Bargaining Power and the Union Wage Premium

Abstract

International audienceThis article identifies the wage premium associated with firm-level union recognition in France. An average premium of 2% is found despite the fact that most workers are already covered by industry-level agreements. To explore the origin of the premium, I construct a simple bargaining model from which I derive three predictions, which are tested empirically using matched employer–employee data. The main prediction is that if intra-firm bargaining is behind the union wage premium, the latter increases with the amount of quasi-rents available in the firms that unions organise. This prediction is validated empirically when firms' market shares are used as a proxy for their rents

Technical efficiency, unions and decentralized labor contracts

“…Indeed, the structure of firmlevel representativeness in Italy seems to partially guarantee that union organizations do not systematically select the best firms. As discussed by Breda (2015), the motivation can be traced to the underlying institutional mechanisms for setting up firm-level union representation bodies. In particular, in many countries of continental Europe the presence of unions is typically based upon the initiative of single employees and their willingness to become worker representatives, without the need for large initial investments by the candidate union.…”

Industrial Relations Reform, Firm‐Level Bargaining and Nominal Wage Floors

“…there are missing information on many firms, and restrict us from constructing firm-specific performance indicators. For instance, it is well established that including controls for market concentration and rent payments may explain a large part of variation in contractual wages (Guertzgen, 2009;Breda 2015). In order to overcome such difficulties, we estimate three indicators by sector and year to be included in our analysis.…”

“…Decentralised collective bargaining is a commonly used mechanism to set wage floors that reflect workplace characteristics, productivity and market idiosyncrasies (Card and de la Rica, 2006;Le Bihan et al, 2012;Breda, 2015;Fougère et al 2018). This mechanism has been found to be popular during recessionary periods because it facilitates nominal downward wage adjustments (Daouli et al 2016;Addison et al 2017;Janssen, 2017).…”

Does Labor Union Utility Increase Workers’ Organizational Commitment and Job Satisfaction? The Moderating Role of Labor Union Membership

“…Thus, high union utility may increase workers' job satisfaction. A union may positively affect certain facets of union-signed workers' job satisfaction including wage premiums (Breda 2015), and union members have more opportunities than nonunion employees to participate in management and express their voices to their employers (Bryson et al 2013).…”