Working Paper: NBER ID: w31988
Authors: Chantal Pezold; Simon Jäger; Patrick Nuss
Abstract: We study how labor market conditions affect unionization decisions. Tight labor markets might spur unionization, e.g., by reducing the threat of unemployment after management opposition or employer retaliation in response to a unionization attempt. Tightness might also weaken unionization by providing attractive outside alternatives to engaging in costly unionization. Drawing on a large-scale, representative survey experiment among U.S. workers, we show that an increase in worker beliefs about labor market tightness moderately raises support for union activity. Effect sizes are small as they imply that moving from trough to peak of the business cycle increases workers’ probability of voting for a union by one percentage point. To study equilibrium effects, we draw on three quasi-experimental research designs using data from across U.S. states and counties over several decades. We find no systematic effect of changes in aggregate labor market tightness on union membership, union elections, and strikes. Overall, our results challenge the notion that labor market tightness significantly drives U.S. unionization.
Keywords: labor market tightness; union activity; unionization decisions
JEL Codes: D83; E32; J21; J23; J51; J52; J53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor market tightness increases worker beliefs about labor market tightness (J29) | Support for union activity (J51) |
| Increase in beliefs about job finding probability (J68) | Pro-union voting intentions (J51) |
| Increase in subjective job finding probability (J29) | Overall union activity (J51) |
| Labor market tightness (J20) | Unionization outcomes (J50) |
| Changes in job search intentions and perceptions of job loss (J65) | Unionization activities (J51) |
| Management opposition to unionization does not decrease in tighter labor markets (J59) | Unionization intentions (J50) |