Do unions make enterprises insolvent?

Richard B. Freeman, Morris M Kleiner

Research output: Contribution to journalArticlepeer-review

64 Scopus citations

Abstract

This study investigates the impact of unionization on closures of firms, business lines, and establishments. Analyzing data from two major data sets - one (from the COMPUSTAT files) on the union status of solvent and insolvent enterprises and business lines, and one (obtained by matching files from the Current Population Survey) on the union status of workers who have lost their jobs due to permanent plant closures or business failures - the authors find little support for the hypothesis that unionization increases the insolvency of firms. The results are consistent with the hypothesis that unions behave in an economically rational manner, pushing wages to the point where union firms may expand less rapidly than nonunion firms, but not to the point where the firm, plant, or business line closes down.

Original languageEnglish (US)
Pages (from-to)510-527
Number of pages18
JournalIndustrial and Labor Relations Review
Volume52
Issue number4
DOIs
StatePublished - Jul 1999

Bibliographical note

Copyright:
Copyright 2017 Elsevier B.V., All rights reserved.

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