Paying to queue: A theory of locational differences in nonunion wages


Journal Article

Traditional theories of the effect unions have on nonunion wages are difficult to reconcile with firm and worker mobility. We show how differences in nonunion wages can persist in a two-city search model. Nonunion wage differences across cities are driven by transition rates into the union sector. Should union queues form in the nonunion sector, union power decreases nonunion wages as workers are willing to take lower wages to line up for union jobs. However, if queues are formed in the unemployed sector, union power increases nonunion wages as nonunion firms pay premiums to induce workers to leave the queue. © 2004 Elsevier Inc. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Ahn, T; Arcidiacono, P

Published Date

  • January 1, 2004

Published In

Volume / Issue

  • 55 / 3

Start / End Page

  • 565 - 579

International Standard Serial Number (ISSN)

  • 0094-1190

Digital Object Identifier (DOI)

  • 10.1016/j.jue.2003.11.005

Citation Source

  • Scopus