The Single Mindedness Theory of Labor Unions

canegrati, emanuele (2006): The Single Mindedness Theory of Labor Unions.

Abstract

In this paper I analyse a labor market where the wage is endogenously determined according to a Right-to-Manage bargaining process between a firm and a labor union whose members are partitioned into two social groups: the old and the young. Furthermore, I exploit the Single Mindedness theory, which considers the existence of a density function which endogenously depends on leisure. I demonstrate that, when preferences of the old for leisure are higher than those of the young and when the level of productivity of the young is higher than that of the old, the young suer from higher tax rates and gain higher level of wage rates and lower levels of leisure. Finally, since the old are more single minded than the young, they exploit their greater political power to get positive transfers from the young in a PAYG system.

• Item Type: MPRA Paper
• Language: English
• Keywords: bargaining models; labor unions; political economy; single mindedness
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice ; Clubs ; Committees ; Associations; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J58 - Public Policy; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy Formulation and Implementation; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J52 - Dispute Resolution: Strikes, Arbitration, and Mediation ; Collective Bargaining

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