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Title
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Inducing political action by workers
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Author
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Abstract
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| A firm aiming to influence a governmental policy may benefit from political action by its stakeholders, such as workers. This article studies the behavior of such a firm, showing that workers will have a greater incentive to engage in costly political activity against the governmental policy the greater their number and the higher the wage. The firm may, therefore, profit from paying above-market wages and from hiring what might appear to be an inefficiently large number of workers. And because unions may overcome free-rider problems of uncoordinated political effort, a firm may favor unionization, or be less opposed to unionization than it would otherwise be. The results of this article can also explain why firms may little reduce wages in a recession, and why the higher wages paid by unionized firms do not reduce survival rates of these firms. |
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Language
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English
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Source (journal)
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Southern economic journal. - Chapel Hill, N.C.
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Publication
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Chapel Hill, N.C.
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2015
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ISSN
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0038-4038
[print]
2325-8012
[online]
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DOI
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10.1002/SOEJ.12046
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Volume/pages
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81
:4
(2015)
, p. 1117-1144
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ISI
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000353962600015
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Full text (Publisher's DOI)
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