Working Paper: NBER ID: w2108
Authors: Steven G. Allen
Abstract: This study examines the effect of unions on job security in the public and private sectors. Despite much lower unemployment rates for public than private sector workers, once one controls for differences in worker and job characteristics, the odds of being unemployed are identical for nonunion workers in the public and private sectors. The picture is quite different for union workers, who face greater odds of becoming unemployed than nonunion workers in private sector jobs but much lower chances of becoming unemployed in the public sector. The ability of unions to reduce layoff and unemployment rates in the public sector seems attributable to the political power to prevent budget cuts and the absence of Unemployment Insurance subsidies or supplemental unemployment benefits.
Keywords: unions; job security; public sector; private sector; layoff rates
JEL Codes: J51; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Political influence of unions (J51) | Lower layoff probabilities in the public sector (J45) |
| Union membership (J51) | Lower layoff probabilities in the public sector (J45) |
| Union membership (J50) | Higher layoff rates in the private sector (J63) |
| Nonunion public sector workers (J45) | Comparable layoff rates to nonunion private sector workers (J58) |