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Innis Lecture: Unions and the Economy: What We Know; What We Should Know

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  • Peter Kuhn

Abstract

The wages and working conditions of about one in three Canadian workers are determined by collective bargaining. In this paper, current knowledge about the economic effects of collective bargaining is surveyed. Unions raise wages (by about 15 percent on average) and reduce wage dispersion for their members while also reducing profits. Unions do not seem to reduce employment levels in affected firms or cause nonunion wages to fall. Efficiency losses due to sectoral misallocation of labor and to strikes are small but some evidence suggests lowered investment in unionized firms. Union effects on total factor productivity need more careful study using firm-level data.

Suggested Citation

  • Peter Kuhn, 1998. "Innis Lecture: Unions and the Economy: What We Know; What We Should Know," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1033-1056, November.
    • Handle: RePEc:cje:issued:v:31:y:1998:i:5:p:1033-1056
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    Citations

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    Cited by:

    1. Meszaros, John, 2018. "Inequality and unionization within the United States," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 326-333.
    2. Scott Legree, Tammy Schirle, Mikal Skuterud, 2014. "The Effect of Labour Relations Laws on Union Density Rates: Evidence from Canadian Provinces," LCERPA Working Papers 0078, Laurier Centre for Economic Research and Policy Analysis, revised 08 Sep 2014.
    3. Lu, Yi & Tao, Zhigang & Wang, Yijiang, 2010. "Union effects on performance and employment relations: Evidence from China," China Economic Review, Elsevier, vol. 21(1), pages 202-210, March.
    4. Vogel, Thorsten, 2007. "Union wage compression in a Right-to-Manage model," SFB 649 Discussion Papers 2007-009, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    5. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    6. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    7. Metcalf, David, 2002. "Unions and productivity, financial performance and investment: international evidence," LSE Research Online Documents on Economics 20072, London School of Economics and Political Science, LSE Library.
    8. Tony Fang & John S. Heywood, 2006. "Unionization and plant closure in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1173-1194, November.
    9. Cunningham, Jamein & Feir, Donn. L. & Gillezeau, Rob, 2021. "Collective Bargaining Rights, Policing, and Civilian Deaths," IZA Discussion Papers 14208, Institute of Labor Economics (IZA).
    10. Mikal Skuterud & Mingcui Su, 2012. "Immigrants and the Dynamics of High-Wage Jobs," ILR Review, Cornell University, ILR School, vol. 65(2), pages 377-397, April.
    11. Scott Legree & Tammy Schirle & Mikal Skuterud, 2017. "The Effect of Labor Relations Laws on Unionization Rates within the Labor Force: Evidence from the Canadian Provinces," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 605-639, October.
    12. de Pinto, Marco & Lingens, Jörg, 2019. "The impact of unionization costs when firm-selection matters," Labour Economics, Elsevier, vol. 60(C), pages 50-63.
    13. David A. Green & James Townsend, 2010. "Understanding the wage patterns of Canadian less skilled workers: the role of implicit contracts," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 373-403, February.
    14. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    15. James Townsend, 2007. "Do tariff reductions affect the wages of workers in protected industries? Evidence from the Canada-U.S. Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 69-92, February.
    16. Fernando Rios-Avila, 2017. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," Revista Ecos de Economía, Universidad EAFIT, vol. 21(44), pages 4-36, June.
    17. William Brown & Paul Ryan, 2003. "The Irrelevance of Trade Union Recognition? A Comparison of Two Matched Companies," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 383-408, September.
    18. Saavedra-Chanduví, Jaime & Torero, Máximo, 2002. "Union Density Changes and Union Effects on Firm Performance in Peru," IDB Publications (Working Papers) 3282, Inter-American Development Bank.
    19. Greer, Mark, 2009. "Is it the labor unions' fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 779-789, November.
    20. Hasan, Rana & Mehta, Aashish & Sundaram, Asha, 2021. "The effects of labor regulation on firms and exports: Evidence from Indian apparel manufacturing," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 183-200.

    More about this item

    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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