Scandinavian Working Papers in Economics
Working Paper Series,
Uppsala University, Department of Economics
No 1996:17: Wage Bargaining, Union Membership, and the Organization of Unemployment Insurance
Bertil Holmlund () and Per Lundborg
Additional contact information
Bertil Holmlund: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Per Lundborg: FIEF, Postal: Wallingatan 38, SE-111 24 Stockholm, Sweden
Abstract: The paper offers a theoretical analysis of a labor market institution known as the Gent system, which is a system where unions run unemployment insurance (UI) through government-subsidized UI funds. This sytem is practiced in four Nordic countries with comparatively very high unionization rates. The analysis shows that the Gent system is more conducive to unionization than a compulsory UI system if the Gent system is heavily subsidized by the government or if workers are strongly risk averse. Moreover, a rise in the share of benefits financed by union members is likely to reduce wages as well as union membership.
Keywords: wage bargaining; union membership; unemployment insurance
36 pages, September 15, 1996
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