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|
|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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- Richard B. Freeman, 1987.
"How Do Public Sector Wages and Employment Respond to Economic Conditions?,"
in: Public Sector Payrolls, pages 183-216
National Bureau of Economic Research, Inc.
- Richard B. Freeman, 1985. "How do Public Sector Wages and Employment Respond to Economic Conditions," NBER Working Papers 1653, National Bureau of Economic Research, Inc.
- Ehrenberg, Ronald G, 1973. "The Demand for State and Local Government Employees," American Economic Review, American Economic Association, vol. 63(3), pages 366-379, June.
- 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 806-817, December.
- Freeman, Richard B, 1986. "Unionism Comes to the Public Sector," Journal of Economic Literature, American Economic Association, vol. 24(1), pages 41-86, March.
- Richard B. Freeman, 1984. "Unionism Comes to the Public Sector," NBER Working Papers 1452, National Bureau of Economic Research, Inc.
- Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260 Elsevier.
- Ronald G. Ehrenberg & Joshua L. Schwarz, 1983. "Public Sector Labor Markets," NBER Working Papers 1179, National Bureau of Economic Research, Inc.
- Gregory M. Saltzman, 1985. "Bargaining Laws as a Cause and Consequence of the Growth of Teacher Unionism," ILR Review, Cornell University, ILR School, vol. 38(3), pages 335-351, April.
- Henry S. Farber & Harry C. Katz, 1979. "Interest Arbitration, Outcomes, and the Incentive to Bargain," ILR Review, Cornell University, ILR School, vol. 33(1), pages 55-63, October.
- Jeffrey S. Zax, 1985. "Labor Relations, Wages and Nonwage Compensation in Municipal Employment," NBER Working Papers 1582, National Bureau of Economic Research, Inc.
- Henry S. Farber, 1981. "Splitting-the-Difference in Interest Arbitration," ILR Review, Cornell University, ILR School, vol. 35(1), pages 70-77, October.
- 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 561-572, November. Full references (including those not matched with items on IDEAS)
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