Working Papers

Unionization, Employer Opposition, and Establishment Closure

    Working Paper, 2024

    Coauthor: Sean Wang

Abstract: We study the effect of private-sector unionization on establishment employment and survival. Our empirical strategy extends standard difference-in-differences techniques with regression discontinuity extrapolation methods. We show that unionization decreases an establishment's employment and likelihood of survival. We hypothesize that two reasons for these effects are firms' ability to avoid working with new unions and their overall opposition to unions. We support these new explanations by showing that firms shift production away from newly unionized establishments and that the negative effects are largest when the firm is likely more opposed to the union.

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.

Publications

Wages and the Value of Nonemployment 

    Quarterly Journal of Economics, (2020)

    Coauthors: Simon Jäger, Benjamin Schoefer, and Josef Zweimüller

    [Publisher's Version] [Online Appendix]

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.