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THOMAS BREDA
This article identifies the wage premium associated with firm-level union recognition in France. An average premium of 2% is found despite the fact that most workers are already covered by industry-level agreements. To explore the origin of the premium, I construct a simple bargaining model from which I derive three predictions, which are tested empirically using matched employer-employee data. The main prediction is that if intra-firm bargaining is behind the union wage premium, the latter increases with the amount of quasi-rents available in the firms that unions organise. This prediction is validated empirically when firms' market shares are used as a proxy for their rents.
