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Length of Service and Layoffs in Union and Nonunion Work Groups

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  • Katharine G. Abraham
  • James L. Medoff

Abstract

This paper presents survey evidence from about 200 firms that protection against job loss grows with employees' length of service even after controlling for the perceived net value of employees to the firm. As would be expected, senior workers are better protected against permanent layoff in union than in nonunion firms, but even in the absence of unionism, longer service generally translates into extra protection. Among the private sector hourly work units outside of agriculture and construction represented in the authors' survey, seniority led to additional protection against job loss in 97 percent of groups covered by a union contract and in 86 percent of uncovered groups. Importantly, however, the extra protection was considerably stronger in the average union group than in the average nonunion group.

Suggested Citation

  • Katharine G. Abraham & James L. Medoff, 1984. "Length of Service and Layoffs in Union and Nonunion Work Groups," ILR Review, Cornell University, ILR School, vol. 38(1), pages 87-97, October.
  • Handle: RePEc:sae:ilrrev:v:38:y:1984:i:1:p:87-97
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    Cited by:

    1. Böckerman, Petri & Skedinger, Per & Uusitalo, Roope, 2018. "Seniority rules, worker mobility and wages: Evidence from multi-country linked employer-employee data," Labour Economics, Elsevier, vol. 51(C), pages 48-62.
    2. Nuria Rodriguez-Planas, 2003. "Signaling in The Labor Market: New Evidence On Layoffs, and Plant Closings," William Davidson Institute Working Papers Series 2003-610, William Davidson Institute at the University of Michigan.
    3. Reich, Michael, 2012. "The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okun’s Law," Institute for Research on Labor and Employment, Working Paper Series qt8sc8s1z1, Institute of Industrial Relations, UC Berkeley.
    4. Dan Goldhaber & Roddy Theobald, 2013. "Managing the Teacher Workforce in Austere Times: The Determinants and Implications of Teacher Layoffs," Education Finance and Policy, MIT Press, vol. 8(4), pages 494-527, October.
    5. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    6. Henry S. Farber, 2007. "Is the Company Man an Anachronism? Trends in Long Term Employment in the U.S., 1973-2006," Working Papers 1039, Princeton University, Department of Economics, Industrial Relations Section..
    7. Farber, Henry S. & Levy, Helen, 2000. "Recent trends in employer-sponsored health insurance coverage: are bad jobs getting worse?," Journal of Health Economics, Elsevier, vol. 19(1), pages 93-119, January.
    8. Peter Carswell, 2005. "The Financial Impact of Organisational Downsizing Practices—The New Zealand Experience," Asia Pacific Journal of Management, Springer, vol. 22(1), pages 41-63, January.
    9. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    10. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    11. Katharine G. Abraham & Susan N. Houseman, 2008. "Removing Barriers to Work for Older Americans," Book chapters authored by Upjohn Institute researchers, in: Timothy J. Bartik & Susan N. Houseman (ed.),A Future of Good Jobs? America's Challenge in the Global Economy, chapter 5, pages 161-202, W.E. Upjohn Institute for Employment Research.
    12. Henry S. Farber, 2016. "Employment, Hours and Earnings Consequences of Job Loss: U.S. Evidence from the Displaced Workers Survey," Working Papers 589a, Princeton University, Department of Economics, Industrial Relations Section..
    13. Henry S. Farber, 1993. "The Incidence and Costs of Job Loss: 1982-91," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1 Microec), pages 73-132.
    14. Elisa Giannone, 2018. "The Large Consequences and the Spillover Effects of a Small Shock," 2018 Meeting Papers 986, Society for Economic Dynamics.
    15. Katharine G. Abraham & Susan N. Houseman, 1993. "Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?," Book chapters authored by Upjohn Institute researchers, in: Christopher F. Buechtemann (ed.),Employment Security and Labor Market Behavior: Interdisciplinary Approaches and International Evidence, pages 180-199, W.E. Upjohn Institute for Employment Research.
    16. Daniel S. Hamermesh, 1986. "Plant Closings, Labor Demand and the Value of the Firm," NBER Working Papers 1839, National Bureau of Economic Research, Inc.
    17. repec:cdl:indrel:qt35g487jh is not listed on IDEAS
    18. Qiu, Yue & Shen, Tao, 2017. "Organized labor and loan pricing: A regression discontinuity design analysis," Journal of Corporate Finance, Elsevier, vol. 43(C), pages 407-428.
    19. Dalia Marciukaityte, 2015. "Right-to-Work Laws and Financial Leverage," Financial Management, Financial Management Association International, vol. 44(1), pages 147-175, March.
    20. Vanessa V Tinsley, 2003. "Firms and Layoffs: The Impact of Unionization on Involuntary Job Loss," Working Papers 03-09, Center for Economic Studies, U.S. Census Bureau.
    21. Ronald BACHMANN & Rahel FELDER, 2018. "Job stability in Europe over the cycle," International Labour Review, International Labour Organization, vol. 157(3), pages 481-518, September.
    22. Henry S. Farber, 1987. "The Decline of Unionization in the United States: What can Be Learned from Recent Experience?," NBER Working Papers 2267, National Bureau of Economic Research, Inc.
    23. Henry S. Farber, 1995. "Are Lifetime Jobs Disappearing? Job Duration in the United States: 1973-1993," NBER Working Papers 5014, National Bureau of Economic Research, Inc.
    24. Audrey Light & Yoshiaki Omori, 2004. "Unemployment Insurance and Job Quits," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 159-188, January.

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