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Outsourcing And Unionization: A Tale Of Misallocated (Resistance) Resources

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  • ELISABETTA MAGNANI
  • DAVID PRENTICE

Abstract

"While many believe the growth in outsourcing contributed to the decline in U.S. unionization up to the 1990s, this argument has never been investigated systematically. In this article, we analyze the effect of outsourcing on unionization between 1973 and 1993. Instrumental variables estimation shows outsourcing contributes to higher quasirents and industry productivity. We find the union wage premium increases with the extent of outsourcing-both for workers that are substitutable by outsourcing services and workers in jobs that are not substitutes of the tasks being outsourced. Finally, we find no support for the claim that outsourcing reduces unionization." ("JEL" J5, L2, L6) Copyright (c) 2009 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 48 (2010)
Issue (Month): 2 (04)
Pages: 460-482

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Handle: RePEc:bla:ecinqu:v:48:y:2010:i:2:p:460-482

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References

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Cited by:
  1. Elisabetta Magnani, 2012. "Vertical disintegration and training: evidence from a matched employer–employee survey," Journal of Productivity Analysis, Springer, vol. 38(2), pages 199-217, October.

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