Risk Aversion and Trade Union Membership

Arbeitspapier

In an open-shop model of trade union membership with heterogeneity in risk attitudes, a worker's relative risk aversion can affect the decision to join a trade union. Furthermore, a shift in risk attitudes can alter collective bargaining outcomes. Using German panel data (GSOEP) and three novel direct measures of individual risk aversion, we find evidence of a significantly positive relationship between risk aversion and the likelihood of union membership. Additionally, we observe a negative correlation between bargained wages in aggregate and average risk preferences of union members. Our results suggest that an overall increase in risk aversion contributes to wage moderation and promotes employment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SOEPpapers on Multidisciplinary Panel Data Research ; No. 88

Classification and Topics

• Classification: Wirtschaft ; Trade Unions: Objectives, Structure, and Effects
• Subject: Employment ; membership ; risk aversion ; trade union

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goerke, Laszlo ; Pannenberg, Markus
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/150637
• Last update: 10.03.2025, 11:45 AM CET