TY  - JOUR
AU  - Kremer,Michael
AU  - Olken,Benjamin A.
TI  - A Biological Model of Unions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8257
PY  - 2001
Y2  - April 2001
UR  - http://www.nber.org/papers/w8257
L1  - http://www.nber.org/papers/w8257.pdf
N1  - Author contact info:
Michael Kremer
Harvard University
Department of Economics
Littauer Center M20
Cambridge, MA 02138
Tel: 617/495-9145
Fax: 617/495-7730
E-Mail: mkremer@fas.harvard.edu

Benjamin A. Olken
Department of Economics
MIT
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/588-1437
Fax: 617/868-2742
E-Mail: bolken@mit.edu
AB  - This paper applies principles from evolutionary biology to the study of unions. We show that unions which maximize the present discounted wages of current members will be displaced in evolutionary competition by unions with more moderate wage policies that allow their firms to live longer. This suggests that unions with constitutional incumbency advantages that allow leaders to moderate members' wage demands may have a selective advantage. The model also suggests that industries with high turnover of firms will have low unionization rates, and that there may be one equilibrium with high unionization and long-lived firms and another with low unionization and short-lived firms. These predictions seem broadly consistent with the data.
ER  -