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Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS

  • Addison, John T.


    (University of South Carolina)

  • Heywood, John S.


    (University of Wisconsin, Milwaukee)

  • Wei, Xiangdong


    (Lingnan University)

In this paper we exploit the longitudinal element of the 1990 and 1998 Workplace Employee Relations Surveys for Britain to investigate the effect of unionism on establishment closings. Contrary to both recent U.S. research and British work using information from the earlier workplace surveys, we find a robust positive association between two measures of unionism - union recognition for collective bargaining purposes and union coverage - and plant closings. This association survives the incorporation of very detailed industry controls but is driven by plants that are parts of multi-establishment enterprises. There appears to be little or no statistically significant association for single plant enterprises. In explaining our findings, we address their consistency with the widely perceived reduction in the "disadvantages of [British] unionism" in recent years.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 352.

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Length: 49 pages
Date of creation: Aug 2001
Date of revision:
Publication status: published in: Southern Economic Journal, 2003, 69 (4), 822-841
Handle: RePEc:iza:izadps:dp352
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  1. Denny, Kevin & Nickell, Stephen J, 1992. "Unions and Investment in British Industry," Economic Journal, Royal Economic Society, vol. 102(413), pages 874-87, July.
  2. Fallick, Bruce C & Hassett, Kevin A, 1999. "Investment and Union Certification," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 570-82, July.
  3. Macpherson, D.A. & Dunne, T., 1992. "Unionism and Gross Employment Flows," Working Papers 1992_10_5, Department of Economics, Florida State University.
  4. Barry T. Hirsch, 1991. "Labor Unions and the Economic Performance of Unions," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number luepf, April.
  5. Addison, John T & Chilton, John B, 1998. "Self-Enforcing Union Contracts: Efficient Investment and Employment," The Journal of Business, University of Chicago Press, vol. 71(3), pages 349-69, July.
  6. Richard B. Freeman & Morris M. Kleiner, 1999. "Do unions make enterprises insolvent?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 510-527, July.
  7. Naercio Menezes-Filho & David Ulph & John Van Reenen, 1998. "R&D and unionism: Comparative evidence from British companies and establishments," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(1), pages 45-63, October.
  8. Grout, Paul A, 1984. "Investment and Wages in the Absence of Binding Contracts: A Nash Bargining Approach," Econometrica, Econometric Society, vol. 52(2), pages 449-60, March.
  9. Menezes-Filho, Naercio & Ulph, David & Van Reenen, John, 1998. "The determination of R&D: Empirical evidence on the role of unions," European Economic Review, Elsevier, vol. 42(3-5), pages 919-930, May.
  10. Kuhn, Peter, 1986. "Wages, Effort, and Incentive Compatibility in Life-Cycle Employment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 28-49, January.
  11. Alan Manning, 1991. "Pre-Strike Ballots and Wage-Employment Bargaining," CEP Discussion Papers dp0019, Centre for Economic Performance, LSE.
  12. David Metcalf, 1993. "Industrial Relations and Economic Performance," CEP Discussion Papers dp0129, Centre for Economic Performance, LSE.
  13. Lazear, Edward P, 1983. "A Competitive Theory of Monopoly Unionism," American Economic Review, American Economic Association, vol. 73(4), pages 631-43, September.
  14. Dunne, T. & Roberts, M.J., 1990. "Wages And The Risk Of Plant Closing," Papers 6-90-2, Pennsylvania State - Department of Economics.
  15. Stephen Machin & M Stewart, 1995. "Trade Unions and Financial Performance," CEP Discussion Papers dp0242, Centre for Economic Performance, LSE.
  16. Curme, Michael & Kahn, Lawrence M, 1990. "The Impact of the Threat of Bankruptcy on the Structure of Compensation," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 419-47, October.
  17. R Disney & A Gosling & Stephen Machin, 1993. "What has Happened to Union Recognition in Britain?," CEP Discussion Papers dp0130, Centre for Economic Performance, LSE.
  18. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December.
  19. Karier, Thomas M, 1985. "Unions and Monopoly Profits," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 34-42, February.
  20. Blanchflower, David G & Millward, Neil & Oswald, Andrew J, 1991. "Unionism and Employment Behaviour," Economic Journal, Royal Economic Society, vol. 101(407), pages 815-34, July.
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