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The Rise And Fall Of Unions In The U.S

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  • Emin Dinlersoz
  • Jeremy Greenwood

Abstract

Union membership in U.S. displayed a n-shaped pattern over the 20th century, while in- come inequality sketched a ?. A model of unions is developed to analyze this phenomenon. There is a distribution of productivity across firms in the economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union chooses how many firms to organize and the union wage. Simulation of the model establishes that skill-biased technological change, which a?ects the productivity of skilled labor relative to unskilled labor, can potentially explain the above facts. Statistical analysis suggests that skill-biased technological change is an important factor in deunionization.

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File URL: http://www2.census.gov/ces/wp/2012/CES-WP-12-12R.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 12-12r.

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Length: 62 pages
Date of creation: Jun 2012
Date of revision: Jun 2013
Handle: RePEc:cen:wpaper:12-12r

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Keywords: Distribution of Income; Flexible Manufacturing; Income Inequality; Mass Production; Numerically Controlled Machines; Relative Price of New Equipment; Skill-Biased Technological Change; Simulation Analysis; Union Coverage; Union Membership; De-unionization;

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References

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  1. MacDonald, Glenn M & Robinson, Chris, 1992. "Unionism in a Competitive Industry," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 10(1), pages 33-54, January.
  2. Ríos-Rull, José-Víctor & Santaeulàlia-Llopis, Raül, 2010. "Redistributive shocks and productivity shocks," Journal of Monetary Economics, Elsevier, Elsevier, vol. 57(8), pages 931-948, November.
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  4. Ohanian, Lee E., 2009. "What - or who - started the great depression?," Journal of Economic Theory, Elsevier, Elsevier, vol. 144(6), pages 2310-2335, November.
  5. Barry T. Hirsch & David A. MacPherson, 1993. "Union membership and coverage files from the Current Population Surveys: Note," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(3), pages 574-578, April.
  6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  7. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
  8. Diego Restuccia & Guillaume Vandenbroucke, . "Explaining Educational Attainment across Countries and over Time," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.
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  10. Baris Kaymak & Omer Acikgoz, 2011. "The Rising Skill Premium and Deunionization in the United States," 2011 Meeting Papers 1433, Society for Economic Dynamics.
  11. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, Econometric Society, vol. 68(5), pages 1029-1054, September.
  12. Samuel E. Henly & Juan M. Sanchez, 2009. "The U.S. establishment-size distribution: secular changes and sectoral decomposition," Economic Quarterly, Federal Reserve Bank of Richmond, Federal Reserve Bank of Richmond, issue Fall, pages 419-454.
  13. David Card & Thomas Lemieux & W. Craig Riddell, 2003. "Unionization and Wage Inequality: A Comparative Study of the U.S, the U.K., and Canada," NBER Working Papers 9473, National Bureau of Economic Research, Inc.
  14. Fair, Ray C & Taylor, John B, 1983. "Solution and Maximum Likelihood Estimation of Dynamic Nonlinear Rational Expectations Models," Econometrica, Econometric Society, Econometric Society, vol. 51(4), pages 1169-85, July.
  15. James A. Schmitz, Jr., 2005. "What determines productivity? lessons from the dramatic recovery of the U.S. and Canadian iron-ore industries following their early 1980s crisis," Staff Report, Federal Reserve Bank of Minneapolis 286, Federal Reserve Bank of Minneapolis.
  16. Reder, Melvin W, 1988. "The Rise and Fall of Unions: The Public Sector and the Private," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 89-110, Spring.
  17. Leena Rudanko & Per Krusell, 2012. "Unions in a Frictional Labor Market," Boston University - Department of Economics - Working Papers Series, Boston University - Department of Economics WP2012-014, Boston University - Department of Economics.
  18. Lee Ohanian & David Lagakos & Simeon Alder, 2012. "The Decline of the U.S. Rust Belt: A Macroeconomic Analysis," 2012 Meeting Papers, Society for Economic Dynamics 793, Society for Economic Dynamics.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The origin of de-unionization in the United States
    by Economic Logician in Economic Logic on 2012-06-04 14:09:00
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Cited by:
  1. repec:cen:wpaper:14-09 is not listed on IDEAS
  2. Per Krusell & Leena Rudanko, 2012. "Unions in a Frictional Labor Market," NBER Working Papers 18218, National Bureau of Economic Research, Inc.
  3. Emin Dinlersoz & Jeremy Greenwood & Henry Hyatt, 2014. "Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," NBER Working Papers 20151, National Bureau of Economic Research, Inc.
  4. Brändle, Tobias & Baumann, Florian, 2013. "Union Bargaining and Intra-Industry Productivity Differentials: Theory and Evidence from Germany," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79852, Verein für Socialpolitik / German Economic Association.

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