Union Work Rules and Efficiency in the Building Trades
AbstractThis paper estimates the effect of union work rules in the building trades on employment and costs by comparing factor demand elasticities for union and nonunion contractors and subcontractors over micro data from two different types of construction. The results show that the elasticities of substitution between labor and nonlabor inputs and own-price elasticities for nonlabor inputs are about the same for union and nonunion contractors. In contrast, the elasticities of substitution among different skill categories of labor and the own-price elasticities for each category are much lower under unionism. A simulation based on a typical office building subcontract shows that these lower factor demand elasticities result in excess staffing of 3.2 percent, excess labor costs of 5.0 percent, and excess total costs of 2.0 percent. This study also examines directly the effect of union work rules on the use of prefabricated components and finds that union contractors are justas likely to use them as nonunion contractors.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1733.
Date of creation: Oct 1985
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Other versions of this item:
- Allen, Steven G, 1986. "Union Work Rules and Efficiency in the Building Trades," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 212-42, April.
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