FINANCIAL AND BARGAINING IMPLICATIONS OF FREE RIDING IN THE FEDERAL SECTOR

The nominally high representation numbers of the major federal sector unions masks a significant free-riding problem. This article examines whether these unions' financial and bargaining outcomes are associated with free riding. Using standard accounting measures of financial per formance, the analysis shows that free riding is related to union liqu idity and reserves. It also reveals substantial interunion differences , with the National Treasury Employees Union having a relatively low f ree-riding rate and a healthier financial position. Bargaining effects are assessed in terms of the financial capacities of the unions to se rve represented employees. Finally, the financial benefits of reductio ns in free riding are estimated.