A Nonmonopoly Theory of Union Wages and Hours Worked

Abstract

An extensive literature review considers the union voice effect on firmperformance. A theoretical model of labor demand under uncertainty is developed thathypothesizes a linkage between firm performance and the union voice effect. The modelgenerates a positive union effect on wages and hours worked without union monopolypower. The model provides a more detailed conceptual framework for explaining why theunion voice effect may improve efficiency within the firm than that currently found in theliterature (J30, J50).