DP801 Unemployment, Real Wages and Union Membership

Author(s): Christoph M Schmidt, Klaus F Zimmermann
Publication Date: July 1993
Keyword(s): Centralization, Cointegration, Unemployment, Union Membership, Unions
JEL(s): E24, J51
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=801

This paper investigates economic determinants and effects of aggregate union membership in the Federal Republic of Germany. We establish that in the long run, high union membership levels coincide not only with a large labour force, but also with a high level of real wages, a small dispersion of wages, and with a relatively large share of aggregate income going to workers. In the short run, union membership dynamics are mainly driven by changes in unemployment. In turn, changes in union membership cause none of the dynamics of other economic aggregates.