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Impacts of Unionization on Quality and Productivity: Regression Discontinuity Evidence from Nursing Homes

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Author Info

  • Sojourner, Aaron J.

    ()
    (University of Minnesota)

  • Frandsen, Brigham R.

    ()
    (Brigham Young University)

  • Town, Robert J.

    ()
    (Wharton School, University of Pennsylvania)

  • Grabowski, David C.

    ()
    (Harvard Medical School)

  • Chen, Michelle M.

    ()
    (Florida International University)

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    Abstract

    This paper studies the effects of nursing home unionization on numerous labor, establishment, and consumer outcomes using a regression discontinuity design. We find negative effects of unionization on staffing levels and no decline in care quality, suggesting positive labor productivity effects. Some evidence suggests that nursing homes in less competitive local product markets and those with lower union density at the time of election experienced stronger union employment effects. Unionization appears to raise wages for a given worker while also shifting the composition of the workforce away from higher-earning workers. By combining credible identification of union effects, a comprehensive set of outcomes over time with measures of market-level characteristics, this study generates some of the best evidence available on many controversial questions in the economics of unions. Furthermore, it generates evidence from the service sector, which has grown in importance and where evidence has been thin.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8240.

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    Length: 66 pages
    Date of creation: Jun 2014
    Date of revision:
    Publication status: Forthcoming: Industrial & Labor Relations Review
    Handle: RePEc:iza:izadps:dp8240

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    Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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    Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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    Related research

    Keywords: trade union; nursing homes; labor productivity; regression discontinuity; collective bargaining; health care quality;

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    References

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    1. John M. Abowd & Henry S. Farber, 1990. "Product Market Competition, Union Organizing Activity, and Employer Resistence," NBER Working Papers 3353, National Bureau of Economic Research, Inc.
    2. Barry T. Hirsch, 2004. "What Do Unions Do for Economic Performance?," Journal of Labor Research, Transaction Publishers, Transaction Publishers, vol. 25(3), pages 415-456, July.
    3. Ernst Fehr & Holger Herz & Tom Wilkening, 2010. "The Lure of Authority: Motivation and Incentive E ects of Power," Department of Economics - Working Papers Series, The University of Melbourne 1115, The University of Melbourne.
    4. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 75, pages 123.
    5. Cawley, John & Grabowski, David C. & Hirth, Richard A., 2006. "Factor substitution in nursing homes," Journal of Health Economics, Elsevier, Elsevier, vol. 25(2), pages 234-247, March.
    6. Gertler, Paul J & Waldman, Donald M, 1992. "Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(6), pages 1232-56, December.
    7. Patrick Bajari & Han Hong & Minjung Park & Robert Town, 2011. "Regression Discontinuity Designs with an Endogenous Forcing Variable and an Application to Contracting in Health Care," NBER Working Papers 17643, National Bureau of Economic Research, Inc.
    8. Thomas J. Holmes, 2006. "Geographic spillover of unionism," Staff Report, Federal Reserve Bank of Minneapolis 368, Federal Reserve Bank of Minneapolis.
    9. Farber, H.S. & Abowd, J.M., 1990. "Product Market Competition, Union Organizing Activity, And The Employer Resistance," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 551, Massachusetts Institute of Technology (MIT), Department of Economics.
    10. Reynolds, Morgan O, 1986. "Trade Unions in the Production Process Reconsidered," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(2), pages 443-47, April.
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