UNEMPLOYMENT-INSURANCE AND UNION BARGAINING - AN INSIDER-OUTSIDER APPROACH

A trade union is required to tax its own members to fund unemployment benefit paid to its unemployed members in an insider-outsider model of union bargaining over wages and employment. An increase in unemployment benefit imposed by the government increases employment overall but not necessarily the employment of insiders if the tax rate is exogenously fixed by the government. © 1991 Springer-Verlag.