Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34997 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3351
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
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.
Subjects: 
Employment
membership
risk aversion
trade union
JEL: 
J51
Document Type: 
Working Paper

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