The Effect of Public Sector Labor laws on Collective Bargaining, Wages, and Employment
AbstractThis paper examines the effect of the different legal environments for bargaining faced by public employees across the states on wage and employment outcomes for union and nonunion employees, and also on the extent of bargaining, using cross-section, within-city, and longitudinal analyses based on a newly-derived data set on public sector labor laws. We find that: (1) the legal environment is a significant determinant of the probability of collective bargaining coverage; (2) collective bargaining coverage raises wages and employment for covered employees; (3) a more favorable legal environment increases wages for all employees, but substantially reduces employment for employees not covered by a contract, while slightly reducing employment for employees who are covered by a contract. We also find evidence of significant spillovers of union wage effects to non-covered departments. We conclude by focusing on the effects of two specific legal provisions - arbitration and strike permitted clauses - on wages and employment.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2284.
Date of creation: Jun 1987
Date of revision:
Publication status: published as Freeman, R. and Valletta, R. "The Effect of Public Sector Labor Laws on Collective Bargaining, Wages, and Employment," in When Public Sector Workers Unionize, ed. by Richard Freeman and Casey Ichniowski, Chicago: UCP, 1988.
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