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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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    Citations

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    Cited by:

    1. 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.
    2. Goerke, Laszlo & Huang, Yue, 2022. "Job satisfaction and trade union membership in Germany," Labour Economics, Elsevier, vol. 78(C).
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Gihleb, Rania & Giuntella, Osea & Tan, Jian Qi, 2023. "The Impact of Right-to-Work Laws on Long Hours and Work Schedules," IZA Discussion Papers 16588, Institute of Labor Economics (IZA).
    8. Samuel Dodini & Anna Stansbury & Alexander Willén & Alexander L.P. Willén, 2023. "How Do Firms Respond to Unions?," CESifo Working Paper Series 10873, CESifo.
    9. 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.
    10. 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.
    11. Sean Wang & Samuel Young, 2023. "Unionization, Employer Opposition, and Establishment Closure," Working Papers 23-35, Center for Economic Studies, U.S. Census Bureau.

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