IDEAS home Printed from https://ideas.repec.org/p/cgs/wpaper/123.html

Household Debt Burden and Union Jobs: Evidence from a Quasi-Experiment in the United States

Author

Listed:
  • Po Yin Wong

    (Queen Mary University of London)

  • Giorgos Gouzoulis

    (Queen Mary University of London)

  • Giorgos Galanis

    (Queen Mary University of London and London School of Economics and Political Science)

Abstract

This paper investigates the causal effect of household indebtedness on unionization in the United States, drawing on longitudinal data from the Panel Study of Income Dynamics (1994–2021) and exploiting exogenous variation from the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Using this policy-induced variation in the cost of repaying debt as an instrument, we find that higher household debt significantly lowers the likelihood of unionized employment, with the effect concentrated in states with right-to-work (RTW) laws. We interpret this result through the lens of institutional labour market frictions. In states with right-to-work laws where agreements requiring all workers to join the union or pay union dues are prohibited, financially constrained workers avoid unionising since this might involve higher conflict, instability, or employer pushback. The findings connect household financial vulnerability to collective-bargaining institutions, highlighting how personal balance sheets and legal regimes jointly shape labour-market behaviour.

Suggested Citation

  • Po Yin Wong & Giorgos Gouzoulis & Giorgos Galanis, 2026. "Household Debt Burden and Union Jobs: Evidence from a Quasi-Experiment in the United States," Working Papers 123, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:123
    as

    Download full text from publisher

    File URL: http://cgr.sbm.qmul.ac.uk/CGRWP123.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gianni Betti & Neil Dourmashkin & Mariacristina Rossi & Ya Ping Yin, 2007. "Consumer over‐indebtedness in the EU: measurement and characteristics," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(2), pages 136-156, May.
    2. Karsten Kohler & Alexander Guschanski & Engelbert Stockhammer, 2019. "The impact of financialisation on the wage share: a theoretical clarification and empirical test," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(4), pages 937-974.
    3. Suresh Naidu, 2022. "Is There Any Future for a US Labor Movement?," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 3-28, Fall.
    4. Gianni Betti & Neil Dourmashkin & Mariacristina Rossi & Ya Ping Yin, 2007. "Consumer over‐indebtedness in the EU: measurement and characteristics," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(2), pages 136-156, May.
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
    6. Giorgos Gouzoulis & Panagiotis (Takis) Iliopoulos & Giorgos Galanis, 2023. "Financialization and the rise of atypical work," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 24-45, March.
    7. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    8. Michael D. Bordo & Claudia Goldin & Eugene N. White, 1998. "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century," NBER Books, National Bureau of Economic Research, Inc, number bord98-1, December.
    9. Freeman, Richard B, 1988. "Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 63-88, Spring.
    10. Tal Gross & Raymond Kluender & Feng Liu & Matthew J. Notowidigdo & Jialan Wang, 2021. "The Economic Consequences of Bankruptcy Reform," American Economic Review, American Economic Association, vol. 111(7), pages 2309-2341, July.
    11. Qing Hu & Ross Levine & Chen Lin & Mingzhu Tai, 2025. "Credit Market Conditions and Mental Health," Management Science, INFORMS, vol. 71(3), pages 1967-1987, March.
    12. Gerald Eric Daniels Jr. & Andria Smythe, 2019. "Student Debt and Labor Market Outcomes," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 171-175, May.
    13. Artz, Benjamin & Blanchflower, David G. & Bryson, Alex, 2022. "Unions increase job satisfaction in the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 173-188.
    14. Ji, Yan, 2021. "Job Search under Debt: Aggregate Implications of Student Loans," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 741-759.
    15. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    16. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 719-741, September.
    17. David G. Blanchflower & Alex Bryson, 2004. "What Effect Do Unions Have on Wages Now and Would Freeman and Medoff Be Surprised?," Journal of Labor Research, Transaction Publishers, vol. 25(3), pages 383-414, July.
    18. Elyas Fermand & Camelia M. Kuhnen & Geng Li & Itzhak Ben-David, 2024. "Extrapolative Uncertainty and Household Economic Behavior," Management Science, INFORMS, vol. 70(8), pages 5607-5625, August.
    19. Carsten Strøby Jensen, 2020. "Labour market segmentation and mobility as determinants of trade union membership: A study from Denmark," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 41(4), pages 824-838, November.
    20. Ricardo Barradas, 2025. "Financialisation, indebted workers and labour discipline: empirical evidence on reduced strike activity in the European Union countries," New Political Economy, Taylor & Francis Journals, vol. 30(4), pages 607-622, July.
    21. Giorgos Gouzoulis, 2024. "Does household indebtedness contribute to the decline of union density?," New Political Economy, Taylor & Francis Journals, vol. 29(3), pages 414-431, May.
    22. Kyle F Herkenhoff, 2019. "The Impact of Consumer Credit Access on Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(6), pages 2605-2642.
    23. Alexander Guschanski & Özlem Onaran, 2025. "The Labour Share and Corporate Financialization: Evidence From Publicly Listed Firms," British Journal of Industrial Relations, London School of Economics, vol. 63(3), pages 375-393, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Po Yin Wong & Giorgos Gouzoulis & Giorgos Galanis, 2025. "Personal Debt Burden and Union Jobs: Evidence from the United States," Working Papers 122, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    2. Potocki, Tomasz, . "Konceptualizacja wyborów finansowych na kanwie teorii możliwości wyboru – analiza teoretyczna," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2022(1).
    3. Jerome ballet & François-Regis Mahieu, 2022. "Social Suffering: A New Reference Framework for Economic Analysis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 54(3), pages 281-297, September.
    4. repec:ulb:ulbeco:2013/353475 is not listed on IDEAS
    5. Chiara Mussida & Dario Sciulli, 2026. "Correction to: A Dynamic Analysis of Arrears and Income Poverty in Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 12(1), pages 703-704, March.
    6. Matthias Enzinger & Melanie Koch & Aleksandra Riedl, 2022. "Financial vulnerabilities and debt at risk of CESEE borrowers: a cross-country analysis," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 44, pages 25-44.
    7. repec:bcp:journl:v:9:y:2025:i:10:p:2539-2546 is not listed on IDEAS
    8. Giorgos Gouzoulis & Panagiotis (Takis) Iliopoulos & Giorgos Galanis, 2025. "EU-induced financialisation and its impact on the Greek wage share, 1999–2021," European Journal of Industrial Relations, , vol. 31(3), pages 287-312, September.
    9. Ryszard Kowalski & Agnieszka Strzelecka & Agnieszka Wałęga & Grzegorz Wałęga, 2023. "Do Children Matter to the Household Debt Burden?," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 1007-1022, December.
    10. Ricardo Barradas, 2025. "Why are (financialised) workers becoming more resigned and conformist and less claimant? Empirical evidence from Portugal," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 46(4), pages 910-941, November.
    11. Nico Keyser & Cecile Duvenhage & Mohamed Abdulla, 2024. "The national credit act and macroeconomic variables in the context of over-indebtedness in South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(6), pages 182-188, September.
    12. Philip Caju & Guillaume Périlleux & François Rycx & Ilan Tojerow, 2023. "A bigger house at the cost of an empty stomach? The effect of households’ indebtedness on their consumption: micro-evidence using Belgian HFCS data," Review of Economics of the Household, Springer, vol. 21(1), pages 291-333, March.
    13. Hua Zan, 2025. "Mapping Family Unsecured Debt Trajectories and Their Association with Adolescent Depression," Journal of Family and Economic Issues, Springer, vol. 46(4), pages 1134-1154, December.
    14. Hein, Eckhard & van Treeck, Till, 2024. "Financialisation and demand and growth regimes: A review of post-Keynesian contributions," ifso working paper series 32, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    15. Michael Baker & Yosh Halberstam & Kory Kroft & Alexandre Mas & Derek Messacar, 2024. "The Impact of Unions on Wages in the Public Sector: Evidence from Higher Education," NBER Working Papers 32277, National Bureau of Economic Research, Inc.
    16. Gouzoulis, Giorgos & Constantine, Collin, 2020. "The Political Economy of Inequality in Chile and Mexico: Two Tales of Neoliberalism," SocArXiv gruzp, Center for Open Science.
    17. Hein, Eckhard, 2020. "Financialisation and stagnation: A macroeconomic regime perspective," IPE Working Papers 149/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    18. Thomas Palley, 2023. "Theorizing Varieties of Capitalism: economics and the fallacy that 'there is no alternative (TINA)'," Chapters, in: Thomas Palley & Esteban Pérez Caldentey & Matías Vernengo (ed.), Varieties of Capitalism, chapter 1, pages 1-38, Edward Elgar Publishing.
    19. Li, Quan & Zhan, Kaiyan & Jiang, Hexin & Li, Tianshu & Zhang, Yuan, 2024. "Impact of financial regulation on labor income share: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 88(C).
    20. Kyle Dempsey & Felicia Ionescu, 2021. "Lending Standards and Borrowing Premia in Unsecured Credit Markets," Finance and Economics Discussion Series 2021-039, Board of Governors of the Federal Reserve System (U.S.).
    21. Andrea Coveri & Mario Pianta, 2019. "The Structural Dynamics of Income Distribution:Technology, Wages and Profits," Working Papers 1901, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    22. Blanchflower, David G., 2006. "A Cross-Country Study of Union Membership," IZA Discussion Papers 2016, IZA Network @ LISER.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cgs:wpaper:123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pedro S. Martins The email address of this maintainer does not seem to be valid anymore. Please ask Pedro S. Martins to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/cgqmwuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.