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The Impact of Unionization on Establishment Closure: A Regression Discontinuity Analysis of Representation Elections

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  • John DiNardo
  • David S. Lee

Abstract

Using data on more than 27,000 establishments (1983-1999) in the United States, this paper produces estimates of the causal effect of unionization of employer closure by exploiting the fact that most employers become 'unionized' as a partial consequence of a secret ballot election among the workers. If employers where unions barely won the election (e.g. by one vote) are ex ante comparable in all other ways to employers where unions barely lost (by one vote), differences in their subsequent outcomes should represent the true impact of union recognition. The regression discontinuity analysis finds little or no union effect on short- and long-run employer survival rates over 1- to 18-year horizons. We thus conclude that evidence of large effects of unions would more likely be found 1) along the within-employer (intensive margin) of employment and/or 2) in analyses of union threat effects.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8993.

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Date of creation: Jun 2002
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Handle: RePEc:nbr:nberwo:8993

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Cited by:
  1. Georgios Karras, 2006. "Foreign aid and long-run economic growth: empirical evidence for a panel of developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(1), pages 15-28.
  2. Falch, Torberg & Strom, Bjarne, 2007. "Wage bargaining and monopsony," Economics Letters, Elsevier, vol. 94(2), pages 202-207, February.
  3. 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.
  4. Uwe Jirjahn, 2010. "Nonunion Worker Representation and the Closure of Establishments: German Evidence on the Role of Moderating Factors," Research Papers in Economics 2010-01, University of Trier, Department of Economics.
  5. Scott Adams & David Neumark, 2004. "The Effects of Living Wage Laws: Evidence From Failed and Derailed Living Wage Campaigns," PPIC Working Papers, Public Policy Institute of California 2004.12, Public Policy Institute of California.
  6. Steven F. Koch and Jeffrey S. Racine, 2013. "Health Care Facility Choice and User Fee Abolition: Regression Discontinuity in a Multinomial Choice Setting," Working Papers 373, Economic Research Southern Africa.
  7. Edgar Preugschat, 2009. "Unionization Patterns and Firm Reallocation," 2009 Meeting Papers, Society for Economic Dynamics 1114, Society for Economic Dynamics.
  8. Lee, David S. & Mas, Alexandre, 2009. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961-1999," Institute for Research on Labor and Employment, Working Paper Series, Institute of Industrial Relations, UC Berkeley qt1j93n8gj, Institute of Industrial Relations, UC Berkeley.
  9. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
  10. Ceyhun Elgin, 2012. "Unionization and Informal Economy," Working Papers 2012/11, Bogazici University, Department of Economics.

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