摘要：In this investigation, a political economy model of the labor market is proposed, where unionsoffertheir(oldandnew)affiliatesthecombinationsbetweentheaveragerealwageleveland the standard deviation of wages or salaries. Globalization and other forces, however, have made it recently more difficult for the unions to pursue their policy in the backdrop of a declining union density. This has been established empirically for selected European countries. In an econometric exercise, we have also tested directlythe impact of changes in real wages, minimumwage rate, and the effect of 90 to 10 decile ratio on the change in the degree of affiliation, which the unions were able to achieve in the recent past. We show empirically for a sample of European countries that unions can be either rewarded fortheir achievements or incentived to correct adverse developments inthelabormarket.
