“Labor Unions reduce product quality”

Alex Tabarrok:

A very nice paper in Management Science by Kini, Shen, Shenoy and Subramanian finds that labor unions reduce product quality. Two strengths of the paper. First, the authors have relatively objective measures of product quality from thousands of product recalls mandated by the FDA, the Consumer Product Safety Commission and the National Highway Traffic Safety Administration covering many different industries. Second the authors use 3 different methods. First, they find that unionized firms are more likely to have recalls than non-unionized firms (a simple difference in means subject to many potential cofounds but I still like to see the raw data), second they find that in a panel model with industry and year fixed effects and other controls that firms which are more unionized have a greater frequency of product recalls. Finally they find that firms where the union just barely won the vote are more likely to have subsequent product recalls than firms for which the union just barely lost the vote–a regression discontinuity study.

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“An emphasis on adult employment”

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