ABSTRACT
The purchase of a particular good is a function of decisions made independently by consumers and producers. Similarly, the determination of union status is a function of decisions made separately by workers, unions and employers. Initially, consider an employee choice model where unions have only one function: they positively affect the wage received by unionized workers. As there is a cost associated with union membership, such as the membership fee and costs of participation in union activity, then the worker becomes unionized when benefits outweigh costs and otherwise remains non-union.
