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The Tradeoff Between Wages and Employment in Trade Union Objectives

Author

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  • John H. Pencavel
Abstract
This paper demonstrates that, contrary to a widely held opinion, the determination of the goals of unions is fully amenable to empirical analysis. A characterization of the wage and employment-setting process in unionized markets is adopted, and its qualitative implications examined. The first-order condition for this model is fitted to time series data on the newspaper industry from ten cities. The International Typographical Union's objective function reveals very restricted opportunities for substituting wages for employment in response to a change in the slope of the employer's labor demand function. Larger union locals place greater emphasis on wages versus employment than smaller union locals.

Suggested Citation

  • John H. Pencavel, 1984. "The Tradeoff Between Wages and Employment in Trade Union Objectives," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(2), pages 215-231.
    • Handle: RePEc:oup:qjecon:v:99:y:1984:i:2:p:215-231.
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    1. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-1181, December.
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    6. Amemiya, Takeshi, 1974. "The nonlinear two-stage least-squares estimator," Journal of Econometrics, Elsevier, vol. 2(2), pages 105-110, July.
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    8. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
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