Where Have Two Million Trade Union Members Gone?

This paper presents an econometric model of trade-union membership in the United Kingdom. The empirical model utilizes cyclical variables in the explanation of membership changes, and separates the short- and long-run dynamics explicitly. It proves to be a superior specification to previous "business cycle" models estimated for the United Kingdom and predicts satisfatorily the recent decline in membership. The inclusion of a dummy variable reflecting the political complexion of the government is the only secular variable which significantly improves equation performance, but the composition of changes in employment plays no part in explaining the recent decline in membership.