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Do Unionized Firms Hire Better Workers?

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  • Wessels, Walter J

Abstract

It is a strong prior among many economists that unionized firms hire better-quality workers to offset higher union wages. In fact, standard economic theory does not support this prior. The key insights introduced by this paper are that, first, unions will likely raise future wages to reflect improvements in worker quality and, second, that unionized firms, anticipating this, often do better by hiring lower-quality workers. This surprising result has empirical support. Copyright 1994 by Oxford University Press.

Suggested Citation

  • Wessels, Walter J, 1994. "Do Unionized Firms Hire Better Workers?," Economic Inquiry, Western Economic Association International, vol. 32(4), pages 616-629, October.
  • Handle: RePEc:oup:ecinqu:v:32:y:1994:i:4:p:616-29
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    Cited by:

    1. Barry T. Hirsch, 2004. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," Journal of Labor Research, Transaction Publishers, vol. 25(2), pages 233-266, April.
    2. Ippolito, Richard A, 2003. "The Impact of the Minimum Wage If Workers Can Adjust Effort," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 207-227, April.
    3. Fernando Rios-Avila, 2017. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," REVISTA ECOS DE ECONOM√ćA, UNIVERSIDAD EAFIT, vol. 21(44), pages 4-36, June.
    4. Arindrajit Dube & Ethan Kaplan & Owen Thompson, 2016. "Nurse Unions and Patient Outcomes," ILR Review, Cornell University, ILR School, vol. 69(4), pages 803-833, August.
    5. Fernando Rios-Avila & Barry T. Hirsch, 2014. "Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 1-27, January.
    6. Barry T. Hirsch, 2008. "Wage Gaps Large and Small," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 914-933, April.
    7. Hirsch, Barry T & Macpherson, David A, 2000. "Earnings, Rents, and Competition in the Airline Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 125-155, January.

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