Unions,seniority, and public choice

This paper examines the implications of granting a seniority-based system to a union whose behavior is determined by a median voter rule. It is shown that the union will negotiate a sequence of wages that will contract union employment in each period. The model then is extended to include an active role for the firm. It is shown that when the firm has the opportunity to resist unionization, the union will not allow union employment to fall below some lower bound. This lower bound is then a steady-state equilibrium.