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Abstract

This paper studies the effects of unions in private-sector nursing homes on a broad range of labor, firm, and consumer outcomes. We link national data on nursing home characteristics from the Centers for Medicare and Medicaid Services to records on establishment-level unionization from federal labor agencies, and employ a regression discontinuity design to identify union effects by contrasting outcomes in nursing homes where unions closely won representation elections to outcomes in facilities where unions closely lost such elections. After showing that these two sets of homes are similar leading up to the election, we estimate union effects on staffing levels, care quality, and other outcomes. We find negative effects of unions on staffing levels and no decline in care quality, suggesting positive productivity effects. Consistent with these results, supplementary analysis shows significant increases in wages for some classes of nursing labor. Some evidence suggests that nursing homes in local product markets that were less competitive and had lower union density at the time of election experienced stronger union employment effects. We find no impact of unionization on facility survival. 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 on these questions has been thin.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17733.

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Date of creation: Jan 2012
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Handle: RePEc:nbr:nberwo:17733

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Find related papers by JEL classification:

• I12 - Health, Education, and Welfare - - Health - - - Health Production
• J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

This paper has been announced in the following NEP Reports:

• NEP-ALL-2012-02-01 (All new papers)
• NEP-LAB-2012-02-01 (Labour Economics)

References

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1. Hirsch, B.T. & Scumacher, E.J., 1996. "Union Wages, Rents, and Skills in Health Care Labor Markets," Working Papers 1996_03_02, Department of Economics, Florida State University.
   
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9. Farber, H.S. & Abowd, J.M., 1990. "Product Market Competition, Union Organizing Activity, And The Employer Resistance," Working papers 551, Massachusetts Institute of Technology (MIT), Department of Economics.
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11. Hirsch, Barry T., 2003. "What Do Unions Do for Economic Performance?," IZA Discussion Papers 892, Institute for the Study of Labor (IZA).
    
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12. John R. Bowblis, 2011. "Ownership conversion and closure in the nursing home industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 631-644, June.
13. Richard B. Freeman & Morris M. Kleiner, 1990. "The Impact Of New Unionization On Wages And Working Conditions: A Longitudinal Study Of Establishments Under NLRB Elections," NBER Working Papers 2563, National Bureau of Economic Research, Inc.
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    • Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
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16. Cawley, John & Grabowski, David C. & Hirth, Richard A., 2006. "Factor substitution in nursing homes," Journal of Health Economics, Elsevier, vol. 25(2), pages 234-247, March.
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18. Reynolds, Morgan O, 1986. "Trade Unions in the Production Process Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 443-47, April.
19. Freeman, Richard Barry & Kleiner, Morris M., 1990. "The Impact of New Unionization on Wages and Working Conditions," Scholarly Articles 4632238, Harvard University Department of Economics.
    
    • Freeman, Richard B & Kleiner, Morris M, 1990. "The Impact of New Unionization on Wages and Working Conditions," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S8-25, January.
20. Mellow, Wesley S, 1981. "Unionism and Wages: A Longitudinal Analysis," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 43-52, February.
21. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.

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