Impact of Communist Parties on the Individual Decision to Join a Trade Union: Evidence From India

Abstract

This paper analyzes the impact on individual decisions to unionize of several factors: the reach of communist parties, the degree of political activism, personal attributes of workers, and industrial characteristics. The workers examined are Indian nonagricultural regular workers, using micro-data from the 2004-5 Employment and Unemployment Survey conducted by the National Sample Survey Organisation, linked to state-level factors. A notable result is that the reach of communist parties has considerable effect on unionization probability. Moreover, it seems that the mere existence of communist parties in a state also facilitates unionization to some extent. State-level political activism and unemployment rate also influence the individual decision to join a union. The paper concludes also that a worker's gender, marital status, ethnic background, employment status, experience, occupation, sector of employment, establishment size, and type of industry remain important in the determination of union membership.d eve_117 496..528

Entry Threats and Inefficiency in ‘Efficient Bargaining’

“…2 Under asymmetric information whether that will still be the case is not obvious. We know from the existing literature that when other bargaining protocols are used such as the right-to-manage bargaining (Nickell and Andrews, 1983), not only is employment distorted but also bargaining frictions can render signalling difficult (see, for example, Dewatripont, 1987Dewatripont, , 1988Ohnishi, 2001;Pal andSaha, 2006, 2008). But as these studies have used inefficient bargaining protocols, it is difficult to ascertain how much of the production inefficiency is attributable to limit pricing and how much to bargaining frictions.…”

“…But if the union is sufficiently powerful, it will see substantial gains from deterring entry and its interest then will be aligned with the firm's. Consequently, the pooling equilibrium will be feasible, and the high cost 4 Note that in many countries, including continental European countries, Anglo-Saxon countries and developing countries like India, union-firm bargaining is a widespread phenomenon (Flanagan, 1999;Alesina et al, 2006;Pal, 2010). In addition, note that disclosure of wage rates is not mandatory by law in most of the developing countries including India, unlike as in Western countries like the United States.…”

“…Note that in many countries, including continental European countries, Anglo‐Saxon countries and developing countries like India, union‐firm bargaining is a widespread phenomenon (Flanagan, ; Alesina et al ., ; Pal, ). In addition, note that disclosure of wage rates is not mandatory by law in most of the developing countries including India, unlike as in Western countries like the United States.…”