Unionisation, short-run flexibility and cost efficiency: Evidence from U.S. manufacturing
AbstractFlexibility is of great interest to policy makers and in the popular policy debate, unions are believed to be a main impediment to achieving it. However, these beliefs are not based on firm empirical foundations. Using a new dataset on U.S. three digit manufacturing industries from 1971 - 1994, we quantify, for the first time, Stigler's concept of output flexibility, estimate input flexibility and quantify the effects of unionisation on both. We find that on average unionisation reduces input flexibility by about 50%, raises average costs by about 3% but reduces output flexibility by just 0.35%.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School of Economics, La Trobe University in its series Working Papers with number 2000.04.
Length: 38 pages
Date of creation: Jun 2000
Date of revision:
Labour Market; Workers Representation; Costs;
Other versions of this item:
Find related papers by JEL classification:
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L6 - Industrial Organization - - Industry Studies: Manufacturing
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward C. Kokkelenberg & Donna R. Sockell, 1985. "Union membership in the United States, 1973û1981," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(4), pages 497-543, July.
- Bils, Mark, 1987. "The Cyclical Behavior of Marginal Cost and Price," American Economic Review, American Economic Association, vol. 77(5), pages 838-55, December.
- Timothy F. Bresnahan & Valerie A. Ramey, 1992.
"Output Fluctuations at the Plant Level,"
NBER Working Papers
4105, National Bureau of Economic Research, Inc.
- Mills, David E, 1984. "Demand Fluctuations and Endogenous Firm Flexibility," Journal of Industrial Economics, Wiley Blackwell, vol. 33(1), pages 55-71, September.
- Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October.
- Ramey, Valerie A, 1989. "Inventories as Factors of Production and Economic Fluctuations," American Economic Review, American Economic Association, vol. 79(3), pages 338-54, June.
- Hoxby, Caroline Minter, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 671-718, August.
- Richard B. Freeman & James L. Medoff, 1979. "New estimates of private sector unionism in the United States," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 32(2), pages 143-174, January.
- Daniel S. Hamermesh & Stephen J. Trejo, 1997.
"The Demand for Hours of Labor: Direct Evidence from California,"
NBER Working Papers
5973, National Bureau of Economic Research, Inc.
- Daniel S. Hamermesh & Stephen J. Trejo, 2000. "The Demand for Hours of Labor: Direct Evidence from California," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 38-47, February.
- Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
- George Stigler, 1939. "Production and Distribution in the Short Run," Journal of Political Economy, University of Chicago Press, vol. 47, pages 305.
- Diewert, Walter E & Wales, Terence J, 1987.
"Flexible Functional Forms and Global Curvature Conditions,"
Econometric Society, vol. 55(1), pages 43-68, January.
- W. Erwin Diewert & T.J. Wales, 1989. "Flexible Functional Forms and Global Curvature Conditions," NBER Technical Working Papers 0040, National Bureau of Economic Research, Inc.
- Jones, Robert A & Ostroy, Joseph M, 1984.
"Flexibility and Uncertainty,"
Review of Economic Studies,
Wiley Blackwell, vol. 51(1), pages 13-32, January.
- Booth,Alison L., 1994.
"The Economics of the Trade Union,"
Cambridge University Press, number 9780521468398, October.
- Randall W. Eberts & Joe A. Stone, 1987.
"Unionization and cost of production: compensation, productivity, and factor-use effects,"
8701, Federal Reserve Bank of Cleveland.
- Eberts, Randall W & Stone, Joe A, 1991. "Unionization and Cost of Production: Compensation, Productivity, and Factor-Use Effects," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 171-85, April.
- Trejo, Stephen J, 1993. "Overtime Pay, Overtime Hours, and Labor Unions," Journal of Labor Economics, University of Chicago Press, vol. 11(2), pages 253-78, April.
- Mayshar, Joram & Halevy, Yoram, 1997. "Shiftwork," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages S198-222, January.
- Freeman, Richard B & Medoff, James L, 1982. "Substitution between Production Labor and Other Inputs in Unionized and Nonunionized Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 220-33, May.
- Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-78, June.
- John M. Abowd & Henry S. Farber, 1990. "Product Market Competition, Union Organizing Activity, and Employer Resistence," NBER Working Papers 3353, National Bureau of Economic Research, Inc.
- Hiebert, L Dean, 1989. "Cost Flexibility and Price Dispersion," Journal of Industrial Economics, Wiley Blackwell, vol. 38(1), pages 103-09, September.
- Earle, John S & Pencavel, John, 1990. "Hours of Work and Trade Unionism," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S150-74, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio).
If references are entirely missing, you can add them using this form.