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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
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    References listed on IDEAS

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    Keywords

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    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

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