Unionization, Employer Opposition, and Establishment Closure
Working Paper, 2022
Coauthor: Sean Wang
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 marginof- 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.
Abstract: I study the effect of noncompete agreements on low-earning workers using a noncompete ban in Austria. The ban increased treated workers’ annual job-to-job transition rate by 0.3 percentage points (a two percent increase). This effect was driven by within-industry job transitions. The reform also disproportionately increased transitions to higher-quality firms and transitions accompanied by earnings gains. However, I do not find that the ban increased treated workers' overall earnings growth rates. This evidence shows that noncompetes in Austria restricted low-earning workers’ job mobility but that their impact was not large enough to affect overall mobility or earnings trends.
Wages and the Value of Nonemployment
Quarterly Journal of Economics, (2020)
Coauthors: Simon Jäger, Benjamin Schoefer, and Josef Zweimüller
Abstract: Nonemployment is often posited as a worker’s outside option in wage setting models such as bargaining and wage posting. The value of nonemployment is therefore a key determinant of wages. We measure the wage effect of changes in the value of nonemployment among initially employed workers. Our quasi-experimental variation in the value of nonemployment arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit changes: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than $0.03. The insensitivity holds even among workers with low wages and high predicted unemployment duration, and among job switchers hired out of unemployment. The insensitivity of wages to the nonemployment value presents a puzzle to the widely used Nash bargaining model, which predicts a sensitivity of $0.24–$0.48. Our evidence supports wage-setting models that insulate wages from the value of nonemployment.