New Evidence on Unions and Layoff Rates

Abstract

This study uses data from the 1980 EOPP establishment survey to test the hypothesis that unionization leads to higher layoff rates. Previous studies, using industry-level data for manufacturing, have found that a firm with 100% of its workers unionized would lay off more than twice as many employees as an otherwise identical nonunionized firm. The results presented here show the unionization effect to be, at most, less than one-fifth as large as that found using industry data. In fact, the author finds that in manufacturing (though not in nonmanufacturing) it is not clear whether unionized establishments lay off more workers than nonunionized establishments because they are unionized or because they tend to be large.

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