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Outsourcing And Unionization: A Tale Of Misallocated (Resistance) Resources




"While many believe the growth in outsourcing contributed to the decline in U.S. unionization up to the 1990s, this argument has never been investigated systematically. In this article, we analyze the effect of outsourcing on unionization between 1973 and 1993. Instrumental variables estimation shows outsourcing contributes to higher quasirents and industry productivity. We find the union wage premium increases with the extent of outsourcing-both for workers that are substitutable by outsourcing services and workers in jobs that are not substitutes of the tasks being outsourced. Finally, we find no support for the claim that outsourcing reduces unionization." ("JEL" J5, L2, L6) Copyright (c) 2009 Western Economic Association International.

Suggested Citation

  • Elisabetta Magnani & David Prentice, 2010. "Outsourcing And Unionization: A Tale Of Misallocated (Resistance) Resources," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 460-482, April.
  • Handle: RePEc:bla:ecinqu:v:48:y:2010:i:2:p:460-482

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    References listed on IDEAS

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    Cited by:

    1. Elisabetta Magnani, 2012. "Vertical disintegration and training: evidence from a matched employer–employee survey," Journal of Productivity Analysis, Springer, vol. 38(2), pages 199-217, October.
    2. Buss, Philipp & Peukert, Christian, 2015. "R&D outsourcing and intellectual property infringement," Research Policy, Elsevier, vol. 44(4), pages 977-989.

    More about this item

    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


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