Australian Evidence on the Exit/Voice Model of the Labor Market

Abstract

Two predictions of the exit/voice model of union activity that have been confirmed by empirical research in the United States are that union workers will have longer tenures and lower quit rates than nonunion workers. This study replicates the methods used in one important U.S. investigation of these “voice” effects to explore whether the same effects are apparent in Australia. The authors' analysis of data on young men from the 1985 Australian Longitudinal Survey yields support for both predictions. Two differences between the Australian and U.S. results are that the union effect on job tenure is considerably larger in Australia than in the United States, and unionism significantly reduces layoff rates in Australia, whereas it has been found to have no significant effect on layoffs in the United States.