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The Surprising Impacts of Unionization: Evidence from Matched Employer-Employee Data

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  • Brigham R. Frandsen

Abstract

This study presents new evidence on the impacts of unionization using administrative data matching workers to employers in a regression discontinuity design. Close union elections exhibit substantial nonrandom selection or manipulation. Estimates accounting for this selection show that unionization substantially decreases payroll, employment, average worker earnings, and establishment survival. Payroll and earnings decreases are driven by composition changes, with older and higher-paid workers leaving unionizing establishments and younger workers joining or staying. Worker-level effects on earnings are small and are reconciled with large negative establishment-level effects in a model of employer and employee selection into union jobs.

Suggested Citation

  • Brigham R. Frandsen, 2021. "The Surprising Impacts of Unionization: Evidence from Matched Employer-Employee Data," Journal of Labor Economics, University of Chicago Press, vol. 39(4), pages 861-894.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/711852
    DOI: 10.1086/711852
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    Cited by:

    1. Rania Gihleb & Osea Giuntella & Jian Qi Tan, 2024. "The impact of right‐to‐work laws on long hours and work schedules," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(3), pages 696-713, June.
    2. Adrian Chadi & Laszlo Goerke, 2023. "Seeking shelter in times of crisis? unemployment, perceived job insecurity and trade union membership," Economica, London School of Economics and Political Science, vol. 90(359), pages 1041-1088, July.
    3. Bustos, Emil, 2024. "Collectively Bargained Wages and Female Earnings: Evidence from Swedish Local Governments," Working Paper Series 1494, Research Institute of Industrial Economics.
    4. Goerke, Laszlo & Huang, Yue, 2022. "Job satisfaction and trade union membership in Germany," Labour Economics, Elsevier, vol. 78(C).
    5. Samuel Dodini & Kjell Salvanes & Alexander L.P. Willén & Kjell G. Salvanes, 2021. "The Dynamics of Power in Labor Markets: Monopolistic Unions versus Monopsonistic Employers," CESifo Working Paper Series 9495, CESifo.
    6. Samuel Dodini & Kjell G. Salvanes & Alexander Willén & Li Zhu & Alexander L.P. Willén, 2023. "The Career Effects of Union Membership," CESifo Working Paper Series 10469, CESifo.
    7. Omesh Kini & Mo Shen & Jaideep Shenoy & Venkat Subramaniam, 2022. "Labor Unions and Product Quality Failures," Management Science, INFORMS, vol. 68(7), pages 5403-5440, July.
    8. Munch, Jakob R. & Olney, William W., 2024. "Offshoring and the Decline of Unions," IZA Discussion Papers 17116, Institute of Labor Economics (IZA).
    9. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    10. Prummer, Anja & Squintani, Francesco, 2024. "An organizational theory of unionization," Discussion Papers 2024/7, Free University Berlin, School of Business & Economics.
    11. Simon Jäger & Shakked Noy & Benjamin Schoefer, 2022. "The German Model of Industrial Relations: Balancing Flexibility and Collective Action," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 53-80, Fall.
    12. Samuel Dodini & Anna Stansbury & Alexander Willén & Alexander L.P. Willén, 2023. "How Do Firms Respond to Unions?," CESifo Working Paper Series 10873, CESifo.
    13. R. Alison Felix & James R. Hines, 2022. "Corporate taxes and union wages in the United States," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(6), pages 1450-1494, December.
    14. Anja Prummer & Francesco Squintani, 2024. "An Organizational Theory of Unionization," Berlin School of Economics Discussion Papers 0056, Berlin School of Economics.
    15. Dodini, Samuel & Willén, Alexander & Zhu, Julia Li, 2023. "The Role of Labor Unions in Immigrant Integration," Discussion Paper Series in Economics 24/2023, Norwegian School of Economics, Department of Economics.
    16. Sean Wang & Samuel Young, 2023. "Unionization, Employer Opposition, and Establishment Closure," Working Papers 23-35, Center for Economic Studies, U.S. Census Bureau.
    17. Guoyu Lin & Anna Bergman Brown & Wentao Wu, 2023. "The effect of unionization on firms’ earnings management and employee compensation: Evidence from a regression discontinuity design," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 50(9-10), pages 1715-1742, October.
    18. Kirill Borusyak & Matan Kolerman-Shemer, 2024. "Regression discontinuity aggregation, with an application to the union effects on inequality," Papers 2501.00428, arXiv.org.
    19. Lagos, Lorenzo, 2024. "Union Bargaining Power and the Amenity-Wage Tradeoff," IZA Discussion Papers 17034, Institute of Labor Economics (IZA).
    20. Viktoriya Lantushenko & Dalia Marciukaityte & Samuel H. Szewczyk, 2024. "Institutional investors and mispricing of unionized firms," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 47(2), pages 249-274, June.

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