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The Effect of Unions on Labor Markets and Economic Growth: An Analysis of State Data

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  • LOU PANTUOSCO
  • DARRELL PARKER
  • GARY STONE

Abstract

Despite voluminous research on unions, there still is no consensus on how unions affect a state's economy. Using a panel of 48 U.S. states for the 1978-1994 period, we estimate a series of simultaneous equations to analyze how unions affect various economic barometers. This provides measures for the partial correlations between unions and performance. The model is then re-estimated using regional dummies to capture fixed effects and to highlight regional differences in the slope of the Phillips curve. We find that unions adversely affect unemployment rates and the growth rates of gross state product (GSP), productivity, and population, while increasing the rate of wage inflation. The impact on the employment growth rate is negative but not significant. A test for fixed effects reveals regional differences in GSP growth. Regional differences in population growth are not significant. Also, the slope of the Phillips curve is significantly different across regions.

Suggested Citation

  • Lou Pantuosco & Darrell Parker & Gary Stone, 2001. "The Effect of Unions on Labor Markets and Economic Growth: An Analysis of State Data," Journal of Labor Research, Transaction Publishers, vol. 22(1), pages 195-205, January.
  • Handle: RePEc:tra:jlabre:v:22:y:2001:i:1:p:195-205
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    Cited by:

    1. Pantuosco, Louis J. & Parker, Darrell & Seyfried, William & Lyman, Scott, 2002. "Macroeconomic Differences in Public and Private Union Density: An Analysis of U.S. State Economies," The Review of Regional Studies, Southern Regional Science Association, vol. 32(2), pages 171-186, Summer/Fa.
    2. Kelly D. Edmiston, 2006. "Workers' Compensation and State Employment Growth," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 121-145.
    3. Louis J. Pantuosco & Darrell Parker, 2005. "The Determinants of Shirking: Analysis and Evidence on Job Loser Unemployment," Eastern Economic Journal, Eastern Economic Association, vol. 31(1), pages 7-21, Winter.
    4. John Budd & Wei Chi & Yijiang Wang & Qianyun Xie, 2014. "What Do Unions in China Do? Provincial-Level Evidence on Wages, Employment, Productivity, and Economic Output," Journal of Labor Research, Springer, vol. 35(2), pages 185-204, June.

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