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Impacts of Unionization on Employment, Product Quality and Productivity: Regression Discontinuity Evidence From Nursing Homes

  • Aaron J. Sojourner
  • Robert J. Town
  • David C. Grabowski
  • Michelle M. Chen

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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File URL: http://www.nber.org/papers/w17733.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17733.

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Date of creation: Jan 2012
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Handle: RePEc:nbr:nberwo:17733
Note: HC LS
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  1. Mellow, Wesley S, 1981. "Unionism and Wages: A Longitudinal Analysis," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 43-52, February.
  2. Acemoglu, Daron & Pischke, Jörn-Steffen, 1998. "The Structure of Wages and Investment in General Training," CEPR Discussion Papers 1833, C.E.P.R. Discussion Papers.
  3. Richard B. Freeman & Morris M. Kleiner, 1994. "Do Unions Make Enterprises Insolvent?," NBER Working Papers 4797, National Bureau of Economic Research, Inc.
  4. Barry T. Hirsch & Edward J. Schumacher, . "Union Wages, Rents, and Skills in Health Care Labor Markets," Working Papers 9721, East Carolina University, Department of Economics.
  5. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
  6. Richard B. Freeman & Morris M. Kleiner, 1988. "The Impact Of New Unionization On Wages And Working Conditions: A Longitudinal Study Of Establishments Under NLRB Elections," NBER Working Papers 2563, National Bureau of Economic Research, Inc.
  7. 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.
  8. Thomas J. Holmes, 2006. "Geographic Spillover of Unionism," NBER Working Papers 12025, National Bureau of Economic Research, Inc.
  9. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs in Economics," NBER Working Papers 14723, 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. 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.
  12. 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.
  13. Barry T. Hirsch & Edward J. Schumacher, . "Unions, Wages, and Skills," Working Papers 9606, East Carolina University, Department of Economics.
  14. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
  15. Freeman, Richard Barry & Kleiner, Morris M., 1990. "The Impact of New Unionization on Wages and Working Conditions," Scholarly Articles 4632238, Harvard University Department of Economics.
  16. 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.
  17. Hirsch, Barry, 2003. "What Do Unions Do for Economic Performance?," IZA Discussion Papers 892, Institute for the Study of Labor (IZA).
  18. Richard B. Freeman & Morris M. Kleiner, 1999. "Do Unions Make Enterprises Insolvent?," ILR Review, Cornell University, ILR School, vol. 52(4), pages 510-527, July.
  19. 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.
  20. repec:cup:cbooks:9780521464673 is not listed on IDEAS
  21. Stewart, M.B., 1989. "Union Wage Differentials, Product Market Influences And The Division Of Rents," The Warwick Economics Research Paper Series (TWERPS) 323, University of Warwick, Department of Economics.
  22. Elhanan Helpman & Paul Krugman, 1987. "Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258087x, June.
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