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A Note on Unionization and the Elasticity of Substitution

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  • Dennis R. Maki
  • Lindsay N. Meredith

Abstract

If unions "force employers off their demand curves" the measured elasticity of substitutio n should be lower where unionization is stronger. Estimates based on pooled data for twenty two-digit SIC Canadian manufacturing industrie s over the period 1971-81 support this proposition. Point estimates a re that the elasticity is 1.98 in the absence of unions, 1.04 if empl oyees are fifty percent unionized, and only 0.10 if employees are one hundred percent unionized. However, the results are not very robust to specification changes.

Suggested Citation

  • Dennis R. Maki & Lindsay N. Meredith, 1987. "A Note on Unionization and the Elasticity of Substitution," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 792-801, November.
    • Handle: RePEc:cje:issued:v:20:y:1987:i:4:p:792-801
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    Cited by:

    1. Debdulal Mallick, 2012. "The role of capital‐labour substitution in economic growth," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 5(1), pages 89-101, April.
    2. Tewodros G. Gebreselasie, 2008. "Sectoral Elasticity Of Substitution And Returns To Scale In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 76(s2), pages 110-125, August.
    3. Michael Knoblach & Fabian Stöckl, 2020. "What Determines The Elasticity Of Substitution Between Capital And Labor? A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 847-875, September.
    4. Kostøl, Fredrik B. & Svarstad, Elin, 2023. "Trade Unions and the Process of Technological Change," Labour Economics, Elsevier, vol. 84(C).
    5. Mallick, Debdulal, 2012. "The role of the elasticity of substitution in economic growth: A cross-country investigation," Labour Economics, Elsevier, vol. 19(5), pages 682-694.

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