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Are union productivity effects overestimated?: evidence from coal mining

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  • Brian Chezum
  • John Garen

Abstract

The empirical literature of the influence of unions on productivity is extended by considering the effect in an industry with heterogeneous firms. Recent theoretical papers suggest that, in such an industry, unions will tend to organize the exogenously 'more productive' firms. Thus, a spurious correlation between unions and productivity may emerge. We test this hypothesis by estimating production functions for coal with data from Eastern Kentucky underground coal mines. The aspect of mine heterogeneity that we focus on is the width of the mine's seam of coal. Wider seams increase productivity. Empirically, we find that unions disproportionately organize mines with wider seams and this accounts for the positive relationship between unions and productivity observed in our data. In fact, once seam thickness is accounted for, the estimated effect of unions on productivity is negative.

Suggested Citation

  • Brian Chezum & John Garen, 1998. "Are union productivity effects overestimated?: evidence from coal mining," Applied Economics, Taylor & Francis Journals, vol. 30(7), pages 913-918.
    • Handle: RePEc:taf:applec:v:30:y:1998:i:7:p:913-918
    DOI: 10.1080/000368498325345
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    Cited by:

    1. Asteriou, Dimitrios & Monastiriotis, Vassilis, 2007. "What do unions do at the large scale? Macro-economic evidence from a panel of OECD countries," Journal of Applied Economics, Universidad del CEMA, vol. 7(1), pages 1-20, May.
    2. Jeremy Smith, 2004. "Productivity Trends in the Coal Mining Industry in Canada," CSLS Research Reports 2004-07, Centre for the Study of Living Standards.
    3. John E. Tilton, 2013. "Cyclical and Secular Determinants of Productivity in the Copper, Aluminum, Iron Ore, and Coal Industries," Working Papers 2013-11, Colorado School of Mines, Division of Economics and Business.

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