Do Unionized Firms Hire Better Workers?

Wessels, Walter J.

doi:10.1111/j.1465-7295.1994.tb01354.x

Cited by 27 publications

(19 citation statements)

References 25 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Controlling for labor quality tends to increase the reported union-productivity effect. This is consistent with the argument advanced by Wessels (1994) that unionized firms do not hire better-quality workers. The DENSITY variable was included to capture any differences between studies that used union density to measure union presence and those which used a union dummy.…”

Section: Meta-regression Analysissupporting

confidence: 91%

What Do Unions Do to Productivity? A Meta‐Analysis

Doucouliagos¹,

Laroche²

2003

Industrial Relations

223

154

View full text Add to dashboard Cite

The impact of unions on productivity is explored using meta-analysis and meta-regression analysis. It is shown that most of the variation in published results is due to specification differences between studies. After controlling for differences between studies, a negative association between unions and productivity is established for the United Kingdom, whereas a positive association is established for the United States in general and for U.S. manufacturing.T HE RELATIONSHIP BETWEEN UNIONS AND PRODUCTIVITY has attracted considerable attention from scholars in industrial relations and economics, as well as from policymakers, unions, and business in general. Despite voluminous theoretical literature, controversy continues regarding the impact of unions on productivity, as well as on other aspects of business, such as employment, research and development (R&D), profitability, and investment. In traditional economic analysis, unions are said to distort labor market outcomes through, for example, legal and custom-driven restrictions on relative wages, the imposition of employment restrictions, and protection against layoffs. Unions are said also to be a contributing factor to aggregate as well as sectoral unemployment and the associated output losses. In contrast to these arguments, Freeman (1976) andFreeman andMedoff (1984) argued that unions can raise productivity by providing workers with a means of expressing discontent as an alternative to "exiting," by opening up communication channels between workers and management, and by inducing managers to alter methods of production and to adopt more efficient policies.The controversy in the theoretical literature is matched by controversy in the empirical literature. Empirical findings are divided between positive and negative union-productivity effects, and many studies cannot reject the hypothesis of a zero effect. Hence generalizations from the available evidence * The authors' affiliations are, respectively,

show abstract

Section: Meta-regression Analysissupporting

confidence: 91%

What Do Unions Do to Productivity? A Meta‐Analysis

Doucouliagos¹,

Laroche²

2003

Industrial Relations

223

154

View full text Add to dashboard Cite

show abstract

“…Theory and evidence suggest that unions may have little effect on average worker skills (Wessels, 1994). Union wage effects following sorting by employers and employees may differ little across worker skill groups, contrary to standard evidence.…”

Section: Introductionmentioning

confidence: 71%

“…Wessels (1994) has provided a simple but persuasive challenge to the skill-upgrading hypothesis. If firms upgrade in response to a union wage increase, the union can then bargain in a future contract for an even higher wage in order to restore the premium.…”

Section: Employer~employee Selection the Skill-upgrading Hypothesmentioning

confidence: 99%

Reconsidering union wage effects: Surveying new evidence on an old topic

Hirsch

2004

J Labor Res

106

View full text Add to dashboard Cite

“…We have no micro-data since 2001 when labour markets loosened and the unemployment rate started to rise again in the United States.3Wessels (1994) has cogently argued that OLS will not necessarily provide an upper limit estimate. His argument is that, provided a union has a certain degree of bargaining power, union-won increases in the wage that lead the firm to hire more able workers will be followed by further union actions to raise the wage.…”

mentioning

confidence: 99%

Changes over time in union relative wage effects in the UK and the US revisited

Blanchflower¹,

Bryson²

2002

View full text Add to dashboard Cite

This paper examines the impact of trade unions in the US and the UK and elsewhere. In both the US and the UK, despite declining membership numbers, unions are able to raise wages substantially over the equivalent non-union wage. Unions in other countries, such as Australia, Austria, Brazil, Canada, Chile, Cyprus, Denmark, Japan, New Zealand, Norway, Portugal and Spain, are also able to raise wages by significant amounts. In countries where union wage settlements frequently spill over into the non-union sector (e.g. France, Germany, Italy, the Netherlands and Sweden) there is no significant union wage differential. The estimates from the seventeen countries we examined averages out at 12 per cent.Time series evidence from both the US and the UK suggests three interesting findings.First, the union differential in the US is higher on average than that found in the UK (18 per cent compared with 10 per cent). Second, the union wage premium in both countries was untrended in the years up to the mid-1990s. Third, in both countries the wage premium has fallen in the boom years since 1994/95. It is too early to tell whether the onset of a downturn in 2002 will cause the differential to rise again or whether there is a trend change in the impact of unions. It is our view that most likely what has happened is that the tightening of the labor market has resulted in a temporary decline in the size of the union wage premium. Time will tell whether the current loosening of the labor market, that is occurring in both countries, will return the union wage premium to its long run values of 10 per cent in the case of the UK and 18 per cent in the case of the US. On the basis of past experience it seems likely that they will.

show abstract

Do Unionized Firms Hire Better Workers?

Cited by 27 publications

References 25 publications

What Do Unions Do to Productivity? A Meta‐Analysis

What Do Unions Do to Productivity? A Meta‐Analysis

Reconsidering union wage effects: Surveying new evidence on an old topic

Changes over time in union relative wage effects in the UK and the US revisited

Contact Info

Product

Resources

About