The Effect of Public Sector Labor laws on Collective Bargaining, Wages, and Employment
This paper examines the effect of the different legal environments for bargaining faced by public employees across the states on wage and employment outcomes for union and nonunion employees, and also on the extent of bargaining, using cross-section, within-city, and longitudinal analyses based on a newly-derived data set on public sector labor laws. We find that: (1) the legal environment is a significant determinant of the probability of collective bargaining coverage; (2) collective bargaining coverage raises wages and employment for covered employees; (3) a more favorable legal environment increases wages for all employees, but substantially reduces employment for employees not covered by a contract, while slightly reducing employment for employees who are covered by a contract. We also find evidence of significant spillovers of union wage effects to non-covered departments. We conclude by focusing on the effects of two specific legal provisions - arbitration and strike permitted clauses - on wages and employment.
|Date of creation:||Jun 1987|
|Date of revision:|
|Publication status:||published as Freeman, R. and Valletta, R. "The Effect of Public Sector Labor Laws on Collective Bargaining, Wages, and Employment," in When Public Sector Workers Unionize, ed. by Richard Freeman and Casey Ichniowski, Chicago: UCP, 1988.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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- Henry S. Farber & Harry C. Katz, 1979. "Interest arbitration, outcomes, and the incentive to bargain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
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1653, National Bureau of Economic Research, Inc.
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- Henry S. Farber, 1981. "Splitting-the-difference in interest arbitration," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(1), pages 70-77, October.
- Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987.
"Public-sector labor markets,"
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in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260
- Courant, Paul N & Gramlich, Edward M & Rubinfeld, Daniel L, 1979. "Public Employee Market Power and the Level of Government Spending," American Economic Review, American Economic Association, vol. 69(5), pages 806-17, December.
- Freeman, Richard B & Medoff, James L, 1981. "The Impact of the Percentage Organized on Union and Nonunion Wages," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 561-72, November.
- Gregory M. Saltzman, 1985. "Bargaining laws as a cause and consequence of the growth of teacher unionism," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(3), pages 335-351, April.
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