Between Government and Market: The Political Economics of Labor Unions

We survey and summarize recent literature on labor unions in political economy. While labor unions have been a long-standing subject of study in labor and macroeconomics, until recently they have been less studied by political economists, despite being important political actors in many policy-relevant contexts. We first organize the literature into work on the external influence of unions on the political system, including effects on voting, campaign finance, lobbying, and intraparty bargaining. We then discuss work on the internal politics and organization of unions, including issues of selection and representation, union aggregation of preferences. We pay special attention to the economic and political effects of public sector unions. We also discuss union behavior in weakly institutionalized contexts, where crime, corruption, rent-seeking, political strikes, and violence are all issues. We conclude with directions for future work.