The economics of the decision to join a union

This article attempts to bring about a synthesis of the theory of human capital and the disparate and largely empirical literature on the impact of unions on an individual worker’s terms and conditions of employment. This is done by modeling the decision of a worker to join a unionized firm or vote for a union in an NLRB election. From this model both the theoretically correct valuation and some empirical estimates of the value of the major wage and nonwage (seniority, discipline and discharge, strikes, dues) impacts of unions are presented. Extensions to risk averse workers, free rider problems, union elections and contract ratification votes are also briefly considered.