Did lower unionization in the United States result in more flexible industries?

Elisabetta Magnani*, David Prentice

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Do unions really impede manufacturers' output flexibility? If so, in what ways? The authors propose a methodology for quantifying George Stigler's concept of output flexibility, and for decomposing the effects of unionization on average cost differences between union and non-union plants. Using a recently compiled data set on U.S. three-digit manufacturing industries from 1973 to 1996, they adapt this methodology to simulate the effects of unionization on flexibility and average costs for average-size plants. Simulation results indicate that higher unionization was associated with higher average costs and lower flexibility than low unionization. Higher average costs appear to have been primarily due to higher fixed costs, such as higher benefits.

Original languageEnglish
Pages (from-to)662-680
Number of pages19
JournalIndustrial and Labor Relations Review
Volume63
Issue number4
Publication statusPublished - Jul 2010
Externally publishedYes

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