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Impacts of Unionization on Quality and Productivity: Regression Discontinuity Evidence from Nursing Homes

  • Sojourner, Aaron J.

    ()

    (University of Minnesota)

  • Frandsen, Brigham R.

    ()

    (Brigham Young University)

  • Town, Robert J.

    ()

    (Wharton School, University of Pennsylvania)

  • Grabowski, David C.

    ()

    (Harvard Medical School)

  • Chen, Michelle M.

    ()

    (Florida International University)

This paper studies the effects of nursing home unionization on numerous labor, establishment, and consumer outcomes using a regression discontinuity design. We find negative effects of unionization on staffing levels and no decline in care quality, suggesting positive labor productivity effects. Some evidence suggests that nursing homes in less competitive local product markets and those with lower union density at the time of election experienced stronger union employment effects. Unionization appears to raise wages for a given worker while also shifting the composition of the workforce away from higher-earning workers. By combining credible identification of union effects, a comprehensive set of outcomes over time with measures of market-level characteristics, this study generates some of the best evidence available on many controversial questions in the economics of unions. Furthermore, it generates evidence from the service sector, which has grown in importance and where evidence has been thin.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8240.

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Length: 66 pages
Date of creation: Jun 2014
Date of revision:
Publication status: Forthcoming: Industrial & Labor Relations Review
Handle: RePEc:iza:izadps:dp8240
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  1. Thomas J. Holmes, 2006. "Geographic Spillover of Unionism," NBER Working Papers 12025, National Bureau of Economic Research, Inc.
  2. Gertler, Paul J & Waldman, Donald M, 1992. "Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1232-56, December.
  3. Reynolds, Morgan O, 1986. "Trade Unions in the Production Process Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 443-47, April.
  4. Cawley, John & Grabowski, David C. & Hirth, Richard A., 2006. "Factor substitution in nursing homes," Journal of Health Economics, Elsevier, vol. 25(2), pages 234-247, March.
  5. Hirsch, Barry, 2003. "What Do Unions Do for Economic Performance?," IZA Discussion Papers 892, Institute for the Study of Labor (IZA).
  6. John R. Bowblis, 2011. "Ownership conversion and closure in the nursing home industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 631-644, June.
  7. Fehr, Ernst & Herz, Holger & Wilkening, Tom, 2012. "The Lure of Authority: Motivation and Incentive Effects of Power," IZA Discussion Papers 7030, Institute for the Study of Labor (IZA).
  8. Patrick Bajari & Han Hong & Minjung Park & Robert Town, 2011. "Regression Discontinuity Designs with an Endogenous Forcing Variable and an Application to Contracting in Health Care," NBER Working Papers 17643, National Bureau of Economic Research, Inc.
  9. John M. Abowd & Henry S. Farber, 1990. "Product Market Competition, Union Organizing Activity, and Employer Resistence," NBER Working Papers 3353, National Bureau of Economic Research, Inc.
  10. Farber, H.S. & Abowd, J.M., 1990. "Product Market Competition, Union Organizing Activity, And The Employer Resistance," Working papers 551, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Oliver E. Williamson, 1967. "Hierarchical Control and Optimum Firm Size," Journal of Political Economy, University of Chicago Press, vol. 75, pages 123.
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