Models of union wage determination: What have we learned since Dunlop and Ross?

This study surveys the development and current status of models of union wage determination since Dunlop and Ross first wrote on the subject in the 1940s. To start, I identify eight empirical dimensions of the union wage effect that models have endeavored to explain and predict. A number of alternative theoretical models are then examined, starting with Dunlop's "economic" and Ross' "political" models and extending to the plethora of models and extensions found in the modern-day literature. Examples include standard monopoly, efficient contract, and bargaining models, as well as offshoots such as median voter, insider-outsider, property rights, and principal-agent models. The article then examines the extent to which these various models generate hypotheses and insights apropos to explaining the eight major empirical dimensions of the union wage effect. The conclusion summarizes what has been learned, the major shortcomings of this literature, and steps for further progress.