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Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS

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Author Info

  • Addison, John T.

    ()
    (University of South Carolina)

  • Heywood, John S.

    ()
    (University of Wisconsin, Milwaukee)

  • Wei, Xiangdong

    ()
    (Lingnan University)

Abstract

In this paper we exploit the longitudinal element of the 1990 and 1998 Workplace Employee Relations Surveys for Britain to investigate the effect of unionism on establishment closings. Contrary to both recent U.S. research and British work using information from the earlier workplace surveys, we find a robust positive association between two measures of unionism - union recognition for collective bargaining purposes and union coverage - and plant closings. This association survives the incorporation of very detailed industry controls but is driven by plants that are parts of multi-establishment enterprises. There appears to be little or no statistically significant association for single plant enterprises. In explaining our findings, we address their consistency with the widely perceived reduction in the "disadvantages of [British] unionism" in recent years.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 352.

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Length: 49 pages
Date of creation: Aug 2001
Date of revision:
Publication status: published in: Southern Economic Journal, 2003, 69 (4), 822-841
Handle: RePEc:iza:izadps:dp352

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Keywords: union recognition; union coverage; plant closures; WERS;

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References

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  1. Bruce C. Fallick & Kevin A. Hassett, 1996. "Investment and union certification," Finance and Economics Discussion Series 96-43, Board of Governors of the Federal Reserve System (U.S.).
  2. Machin, Stephen & Stewart, Mark, 1996. "Trade Unions and Financial Performance," Oxford Economic Papers, Oxford University Press, vol. 48(2), pages 213-41, April.
  3. Richard B. Freeman & Morris M. Kleiner, 1994. "Do Unions Make Enterprises Insolvent?," NBER Working Papers 4797, National Bureau of Economic Research, Inc.
  4. R Disney & A Gosling & Stephen Machin, 1993. "What has Happened to Union Recognition in Britain?," CEP Discussion Papers dp0130, Centre for Economic Performance, LSE.
  5. Blanchflower, David G & Millward, Neil & Oswald, Andrew J, 1991. "Unionism and Employment Behaviour," Economic Journal, Royal Economic Society, vol. 101(407), pages 815-34, July.
  6. Naercio Menezes-Filho & David Ulph & John Van Reenen, 1998. "R&D and unionism: Comparative evidence from British companies and establishments," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(1), pages 45-63, October.
  7. Dunne, T. & Roberts, M.J., 1990. "Wages And The Risk Of Plant Closing," Papers 6-90-2, Pennsylvania State - Department of Economics.
  8. Edward P. Lazear, 1981. "A Competitive Theory of Monopoly Unionism," NBER Working Papers 0672, National Bureau of Economic Research, Inc.
  9. Curme, Michael & Kahn, Lawrence M, 1990. "The Impact of the Threat of Bankruptcy on the Structure of Compensation," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 419-47, October.
  10. Denny, Kevin & Nickell, Stephen J, 1992. "Unions and Investment in British Industry," Economic Journal, Royal Economic Society, vol. 102(413), pages 874-87, July.
  11. Kuhn, Peter, 1986. "Wages, Effort, and Incentive Compatibility in Life-Cycle Employment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 28-49, January.
  12. Grout, Paul A, 1984. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargining Approach," Econometrica, Econometric Society, vol. 52(2), pages 449-60, March.
  13. Alan Manning, 1991. "Pre-Strike Ballots and Wage-Employment Bargaining," CEP Discussion Papers dp0019, Centre for Economic Performance, LSE.
  14. Barry T. Hirsch, 1991. "Labor Unions and the Economic Performance of Unions," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number luepf.
  15. Macpherson, D.A. & Dunne, T., 1992. "Unionism and Gross Employment Flows," Working Papers 1992_10_5, Department of Economics, Florida State University.
  16. David Metcalf, 1993. "Industrial Relations and Economic Performance," CEP Discussion Papers dp0129, Centre for Economic Performance, LSE.
  17. Karier, Thomas M, 1985. "Unions and Monopoly Profits," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 34-42, February.
  18. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December.
  19. Menezes-Filho, Naercio & Ulph, David & Van Reenen, John, 1998. "The determination of R&D: Empirical evidence on the role of unions," European Economic Review, Elsevier, vol. 42(3-5), pages 919-930, May.
  20. Addison, John T & Chilton, John B, 1998. "Self-Enforcing Union Contracts: Efficient Investment and Employment," The Journal of Business, University of Chicago Press, vol. 71(3), pages 349-69, July.
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Citations

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Cited by:
  1. Blanchflower, David G., 2006. "A Cross-Country Study of Union Membership," IZA Discussion Papers 2016, Institute for the Study of Labor (IZA).
  2. Addison, John T. & Belfield, Clive R., 2002. "Unions and Employment Growth: The One Constant?," IZA Discussion Papers 479, Institute for the Study of Labor (IZA).
  3. Addison, John T. & Siebert, W. Stanley, 2002. "Changes in Collective Bargaining in the U.K," IZA Discussion Papers 562, Institute for the Study of Labor (IZA).

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