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Unionization and input flexibility in U.S. manufacturing, 1973-1996

  • Elisabetta Magnani
  • David Prentice

Input flexibility, as measured by the ability of firms to vary input demand in the face of changes in input prices, is an important dimension of labor market flexibility. Using a new dataset, the authors analyze the impact of unionization on input flexibility in U.S. manufacturing from 1973 to 1996, a period in which production was arguably becoming more flexible due to deep changes in the U.S. industrial relations system and in the broad macroeconomic environment. The authors quantify the effects of unionization on input flexibility by estimating elasticities of substitution between a broad range of labor and non-labor inputs, controlling for unionization. The pattern that emerges is more complex than that suggested by other research. In particular, low unionization apparently is associated with greater flexibility in the use of labor inputs but less flexibility in the use of non-labor inputs. (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 59 (2006)
Issue (Month): 3 (April)
Pages: 386-407

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Handle: RePEc:ilr:articl:v:59:y:2006:i:3:p:386-407
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  1. John Paul Macduffie, 1995. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry," ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
  2. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
  3. Subhash C. Sharma, 2002. "The Morishima Elasticity of Substitution for the Variable Profit Function and the Demand for Imports in the United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 115-135, February.
  4. John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 348-352, May.
  5. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
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