Is Bigger Better? Union Size and Expenditure on Members

Abstract

From the late 1980s to the mid-1990s Australian trade unions engaged in a series of amalgamations. One of the main rationales for these mergers was that larger unions would benefit from economies of scale. But this proposition has been contested in debates sparked by the Australian union amalgamation round. Research literature on union mergers and the economics of union administration is reviewed to identify factors affecting the costs incurred by unions in servicing their membership. Multivariate allalysis of data from a sample of thirty-four Australian unions suggests that larger unions incur lower costs in servicing their members when other factors thought to affect union cost structures are held constant. But methodological and conceptual issues meau that the findings do not provide unambiguous evidence for the existence of economies of scale.