REPUTATION, MEMBERSHIP AND WAGES IN AN OPEN SHOP TRADE-UNION

In Britain there is no longer statutory support for the closed shop, and in the USA many states have 'right-to-work' laws. Wages and membership determination are examined in this setting. The main findings are: (i) already established unions will not necessarily wither away with the mere passage of right-to-work laws; (ii) however, they may disintegrate when faced with substantial negative demand shocks; (iii) new unions will find it harder to become established; (iv) greater dispersion in worker attitudes to joining unions will lower membership but not necessarily wages-which is broadly consistent with some empirical studies.