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Unionization and Productivity in Office Building and School Construction

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  • Steven G. Allen

Abstract

This paper examines the difference in productivity between union and nonunion contractors in the construction industry over a sample of 83 commercial office buildings and another sample of 68 elementary and secondary schools. The popular belief that the building trades unions reduce productivity in the industry is soundly rejected in both samples. Square footage per man hour is 38 percent higher in office buildings built predominantly by union labor, controlling for differences in capital-labor ratios, observable labor quality, region, and building characteristics. Estimates of the union-nonunion productivity difference in the school sample range from zero (when output is measured in physical units) to 20 percent greater for union contractors (when output is measured as value added deflatedby regional price differences), controlling for the same factors. Possible sources of higher union productivity in the office building sample are explored. A lower ratio of supervision to production worker hours and use of technologies and materials that economize on labor account for as much as 25 percent of the higher productivity observed in the union sample. The remainder is probably attributable to apprenticeship training, unobserved labor quality, economies of recruiting and screening, and improved manangement.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1139.

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Date of creation: Apr 1986
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Publication status: published as Allen, Steven G. "Unionization and Productivity in Office Building and School Construction." Industrial and Labor Relations Review, Vol. 39, No. 2,(January 1986), pp. 187-201.
Handle: RePEc:nbr:nberwo:1139

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Cited by:
  1. Hirsch, Barry, 2010. "Unions, Dynamism, and Economic Performance," IZA Discussion Papers 5342, Institute for the Study of Labor (IZA).
  2. Steven G. Allen, 1985. "The Effect of Unionism on Productivity in Privately and Publicly Owned Hospitals and Nursing Homes," NBER Working Papers 1649, National Bureau of Economic Research, Inc.
  3. Gupta, Bishnupriya, 2006. "Unions, Wages and Labour Productivity : Evidence from Indian Cotton Mills," The Warwick Economics Research Paper Series (TWERPS) 753, University of Warwick, Department of Economics.
  4. David Lee & Alexandre Mas, 2009. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961-1999," NBER Working Papers 14709, National Bureau of Economic Research, Inc.
  5. Steven G. Allen, 1985. "Union Work Rules and Efficiency in the Building Trades," NBER Working Papers 1733, National Bureau of Economic Research, Inc.
  6. Kevin Duncan & Peter Philips & Mark Prus, 2006. "Prevailing wage legislation and public school construction efficiency: a stochastic frontier approach," Construction Management and Economics, Taylor & Francis Journals, vol. 24(6), pages 625-634.

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