In Germany, there is no trade union membership wage premium, while the membership fee amounts to 1% of the gross wage. Therefore, prima facie, there are strong incentives to free-ride on the benefits of trade unionism. We establish empirical evidence for a private gain from trade union...

This paper employs a wage-setting approach to analyze the labor market effects of immigration into Germany. The wage-setting framework relies on the assumption that wages tend to decline with rising unemployment, albeit imperfectly. This enables us to consider labor market rigidities, which are...

Economic research suggests that the amount and duration of unemployment benefits can increase equilibrium rate of unemployment, but the literature has overlooked the effects of other restrictions on benefits, namely the length of the qualifying period and the base period. We develop a...