Longitudinal Analyses of the Effects of Trade Unions

This paper examines how measurement error biases longitudinal estimates of union effects. It develops numerical examples, statistical models, and econometric estimates which indicate that measurement error is a major problem in longitudinal data sets, so that longitudinal analyses do not provide the research panacea for determining the effects of unionism (or other economic forces) some have suggested. There are three major findings:1) The difference between the cross-section and longitudinal estimates is attributable in large part to random error in the measurement of who changes union status. Given modest errors of measurement, of the magnitudes observed,and a moderate proportion of workers changing union status, also of the magnitudes observed, measurement error biases downward estimated effects of unions by substantial amounts. 2) Longitudinal analysis of the effects of unionism on nonwage and wage outcomes tends to confirm the significant impact of unionism found in cross-section studies, with the longitudinal estimates of both nonwage and wage outcomes lover in the longitudinal analysis than in the cross-section analysis of the same data set. 3) The likely upward bias of cross-section estimates of the effect of unions and the likely downward bias of longitudinal estimates suggests that,under reasonable conditions, the two sets of estimates bound the "true" union impact posited in standard models of what unions do.

Public Policy and Employment Discrimination in the U.S.

This paper examines evidence on employment practices in the U.S. with respect to race and the impact of governmental anti-bias activity on these practices. It shows a striking difference in the responses of American employers to job applications differing in race from the responses of British employers and asks whether these differences can be attributed to the greater U.S. effort to aid minority workers. It reviews the recent research by Jonathan Leonard on the effect of court suits and affirmative action compliance activity and concludes that much of the improved status of minorities in the U.S. is indeed due to governmental activity and public policy.

The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits

This paper examines the effect of trade unionism on the exit behavior of workers in the context of Hirschman's exit-voice dichotomy. Unionism is expected to reduce quits and permanent separations and raise job tenure by providing a "voice" alternative to exit when workers are dissatisfied with conditions. Empirical evidence supports this contention, showing significantly lower exit for unionists in several large data tapes. It is argued that the grievance system plays a major role in the reduction in exit and that the reduction lowers cost and raises productivity.

Searching for the EU Social Dialogue Model

The European Union and the United States operate different variants of market capitalism. The EU model uses social dialogue institutions to help determine economic outcomes, particularly in the labor market, whereas the US relies more on market forces. The theory of competitive markets provides a powerful framework for analyzing market driven economies and for assessing the conditions under which unfettered markets yield desirable outcomes. But there is no comparable framework for analyzing institution driven economies. This paper argues that models of efficient bargaining/the Coase Theorem offer the best framework for analyzing social dialogue economies and for identifying policies and institutional reforms to improve their functioning.

Why is There A Youth Labor Market Problem?

This paper examines what is known about the causes of the high and increasing levels of youth joblessness and related problems in the youth labor market. Partly because of inconsistencies in reported rates of youth employment across surveys and partly because of problems in measuring key social variables, it is difficult to reach firm conclusions. As far as can be told, much of the relatively high rate of youth joblessness can be attributed to turnover and mobility patterns that are normal in the U.S. economy, but much is also directly related to a dearth of jobs. Demand forces, which have come to be neglected in favor of supply in much popular discussion of youth joblessness, are major determinants of variation in youth employment over time and among areas. For groups facing the most severe joblessness problems, however, the difficulty due to lack of jobs appears to be compounded by problems of employability related to deleterious social patterns. Surprisingly, perhaps, the factors that determine the probability that young persons end up employed or jobless differ substantively from those that determine wages. The paper explains the decline in the earnings of young workers relative to old workers in terms of the increased number of young persons. It speculates that the decline in relative wages may have contributed significantly to the stable ratio of employment to population among young whites. The causes of the downward trend in youth employment for nonwhites -- which constitute one of the major developments of the period -- remain a conundrum.