This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. ASSA Annual Meeting
  3. 2023
  4. Program
  5. Labor Market Institutions
« Back to Results

Labor Market Institutions

Paper Session

Friday, Jan. 6, 2023 8:00 AM - 10:00 AM (CST)

Hilton Riverside, Steering
Hosted By: Labor and Employment Relations Association
  • Chair: Zachary Bethune, Rice University

Unionization, Employer Opposition, and Establishment Closure

Samuel Young
,
Massachusetts Institute of Technology
Sean Wang
,
Massachusetts Institute of Technology

Abstract

We study the effect of private-sector unionization on establishment employment and survival. Specifically, we analyze National Labor Relations Board union elections from 1981–2005 using administrative Census data. Our empirical strategy extends standard difference-in-differences techniques with regression discontinuity extrapolation methods. This allows us to avoid biases from only comparing close elections and to estimate treatment effects that include larger margin-of-victory elections. Using this strategy, we show that unionization decreases an establishment’s employment and likelihood of survival, particularly in manufacturing and other blue-collar and industrial sectors. We hypothesize that two reasons for these effects are firms’ ability to avoid working with new unions and employers’ opposition to unions. We test this hypothesis for manufacturing elections and find that the negative effects are significantly larger for elections at multi-establishment firms. Additionally, after a successful union election at one establishment, employment increases at the firms’ other establishments. Both pieces of evidence are consistent with firms avoiding new unions by shifting production from unionized establishments to other establishments. Finally, we find larger declines in employment and survival following elections where managers or owners were likely more opposed to the union. This evidence supports new reasons for the negative effects of unionization we document.

These Caps Spilleth Over: Equilibrium Effects of Unemployment Insurance

Cynthia Doniger
,
Federal Reserve Board
Desmond Toohey
,
University of Delaware

Abstract

The design of US unemployment insurance (UI) policy - which features benefits assigned as a percentage of past wages up to a cap - engenders tests for spillovers from policy variation to workers who are not directly treated. Using variation in state-level UI parameters over time and data from the Benefits Accuracy Measurement program and the Survey of Income and Program Participation, we test for and find a pattern of spillovers that cannot be neatly reconciled with workhorse or cutting-edge models of the labor market. However, we show that the documented pattern confirms the predictions of a standard model of wage posting with random search. Taken together, our results provide novel evidence of information frictions in the market for the lowest paid and most cyclically sensitive labor. In addition, the model that we have empirically validated implies that progressive social insurance can alleviate inefficiency stemming from information frictions. Indeed, our estimates suggest that, in the typical US state, aggregate unemployment of insured individuals would decrease if the replacement rate were increased while holding the cap constant.

The Role of Industry in Increasing Earnings Inequality: Reconciling Results from the CPS and the LEHD

John Haltiwanger
,
University of Maryland
Henry Hyatt
,
U.S. Census Bureau
James Spletzer
,
U.S. Census Bureau

Abstract

What drives increasing earnings inequality? The answer to this question seems to depend on the data source. One strand of the inequality literature uses survey data and emphasizes individual characteristics such as age, education, and gender. Other studies on inequality use administrative records data and emphasize the role of firms and industries. Why do these different data sources tell such different stories? To address this, we link survey responses from the Current Population Survey (CPS) with administrative records from the U.S. matched employer-employee data. Our findings are several, and often highlight the differences in how employer industry is treated in the survey vs. administrative records data. (1) Surveys have emphasized industry-level pay premia as the main employer-determined contribution to inequality. We demonstrate how to use survey data to estimate additional determinants of inequality that are commonly applied to administrative records data. Specifically, we demonstrate how to measure the contribution of sorting (low- vs. high-paid workers at low- vs. high-paying firms) and segregation (the extent to which low- vs. high-paid workers are concentrated in the same industries) in the CPS. (2) Inequality estimates derived from survey data typically exclude very low earnings, which limits the industry contribution to inequality as reported in the administrative records data. (3) We assess the extent to which respondent-reported industries agree with administrative records on employer industry, and explore the role of industry disagreement in the evolution of employer-driven inequality. (4) We measure the agreement between the earnings in the CPS vs. administrative records and present new estimates of the time trend of the correlation between these two earnings measures, and explore the role of survey nonresponse and imputation

Discussant(s)
Aaron Sojourner
,
W.E. Upjohn Institute for Employment Research
Jose Mustre-del-Rio
,
Federal Reserve Bank of Kansas City
Jonathan Fisher
,
Washington Center for Equitable Growth
JEL Classifications
  • J2 - Demand and Supply of Labor
  • J1 - Demographic Economics