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Segmentation, switching costs and the demand for unionization in Britain

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This paper explains why some employees who favor unionization fail to join, and why others who wish to abandon union membership continue paying dues. Our explanation is based on a model where employees incur switching (search) costs when attempting to abandon (acquire) union membership. Empirical analysis for Britain confirms one of the main predictions from the switching-cost- model that segmentation in the market for unionization persists even when mandatory membership provisions are eliminated and economy-wide density falls. The importance of these and other empirical findings for both theory and policy are discussed.

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en

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application/pdf

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http://eprints.lse.ac.uk/4947/1/Segmentation%2C_switching_costs_and_the_demand_for_unionization_in_Britain_%28LSERO%29.pdf

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