Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses¶

Literature › Works

Emin Dinlersoz; Jeremy Greenwood; Henry Hyatt (2014). Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses. NBER Working Paper No. 20151. National Bureau of Economic Research.


Type	working paper
Scope	Comparative and methods
Method	econometric
Period studied	1977–2007
Regions	United States
Themes	unions strikes, comparative theory, methods data sources, labour markets wages
Citation key	`dinlersoz2014`

Argument¶

The paper asks which businesses unions target for organizing and when. It builds a dynamic Bayesian learning model, a variant of Jovanovic (1982), in which a union monitors establishments to learn their productivity. The model predicts that unions target larger, more productive and younger establishments, and that conditional on targeting they win elections more often in smaller, less productive ones. Matching NLRB certification-election data (1977-2007) to Census Bureau establishment data and estimating logit models supports these predictions. Size effects are much stronger than productivity effects, and all effects are stronger in manufacturing. The authors conclude that union selection is non-random and must be accounted for in studies of union effects.

Evidence and method¶

All NLRB certification and decertification elections for 1977-2007 (103,064 elections), matched at about 73% to the Census Bureau's Longitudinal Business Database, the quinquennial Economic Census revenue data and Census of Manufactures total factor productivity. About 89,400 establishments match to elections. Establishments born in or after 1977 are used to avoid left-censoring. The estimates include 2-digit SIC industry, state and year fixed effects.

Findings¶

Size strongly raises the probability of being targeted for a first certification election across the private sector. (p. 5)

the likelihood of an establishment with more than 500 employees being targeted by a union is about 10 times larger than an establishment with less than 10 employees
Union targeting is concentrated early in an establishment's life-cycle. (p. 5)

The youngest group of establishments (0-3 years old) are approximately twice as likely to be targeted as the oldest group (25+ years old).
Conditional on a certification election, unions win less often in large establishments. (p. 6)

all else equal, the probability of win is about 30% for the largest employment category (500+ employees), and about 60% for the smallest category (1-9 employees)
The lower win rate in large establishments does not offset heavier targeting, so successful organizing rises with size. (p. 6)

Establishments in the largest employment category are 12 times more likely to be successfully organized by a union compared with the smallest category.
Size effects are stronger and more precisely estimated than productivity effects. (p. 6)

In general, size eﬀects tend to be much higher in magnitude and statistically more signiﬁcant than productivity eﬀects.
The selection patterns imply that studies of unionization's effects must allow for selection bias. (p. 7)

These selection biases need to be taken into account in assessing the eﬀects of unionization on business outcomes.
Larger and older establishments are more likely to be unionized at any point in time. (p. 30)

Larger and older establishments are more likely to be unionized.
The election dataset is large, but only about three-quarters of elections can be matched to establishments. (p. 26)

About 73% of certiﬁcation elections match reliably with the LBD for the sample period.
The dataset covers a large number of NLRB elections over three decades. (p. 24)

Over the sample period, the NLRB data contain information on a total of 103064 certiﬁcation elections.