Did Reducing Unionization Create More Flexible American Industries?
AbstractDo unions really impede manufacturersÌ output flexibility? If so, in what ways? The authors propose a methodology for quantifying George Stigler's concept of output flexibility and for decomposing the effects of unionization on average cost differences between union and non-union plants. Using a recently compiled data set on U.S. three-digit manufacturing industries from 1973 to 1996, they adapt this methodology to simulate the effects of unionization on flexibility and average costs for average-size plants. Simulation results indicate that higher unionization was associated with higher average costs and lower flexibility than low unionization. Higher average costs appear to have been primarily due to higher fixed costs, such as higher benefits.
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 63 (2010)
Issue (Month): 4 (July)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
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