Trade Unions, Collective Voice and Fringe Benefits*

The exit/voice model of the labour market predicts that unionized workers will enjoy a greater level of fringe benefits, both absolutely and as a share of total compensation, than non‐unionists. This is because unions can, through the medium of collective voice, communicate to management a picture of the preferences of the median worker. In non‐union settings, however, management responds to the perceived preferences of the young, mobile workers at the hiring margin and these typically place a low priority on fringe benefits relative to money wages. Using data from the A ustralian Longitudinal Survey it is found that the hypothesis is supported by the evidence for Australia.