Do Unions Affect Innovation?

We examine the effect of unionization on firm innovation, using a regression discontinuity design that relies on “locally” exogenous variation generated by elections that pass or fail by a small margin of votes. Passing a union election results in an 8.7% (12.5%) decline in patent quantity (quality) three years after the election. A reduction in R&D expenditures, reduced productivity of inventors, and departures of innovative inventors appear to be plausible underlying mechanisms through which unionization impedes firm innovation. In response to unionization, firms move their innovation activities away from states where union elections win. Our paper provides new insights into the real effects of unionization

Collective Bargaining and Technological Investment: The Case of Nurses’ Unions and the Transition from Paper-Based to Electronic Health Records

Does the presence of a unionized nursing workforce retard U.S. hospitals’ transition from paper-based to electronic health records (EHRs)? After tying archival data on hospitals’ structural features and health information technology (IT) investment patterns to self-gathered data on unionism, I find that hospitals that bargain collectively with their registered nurses (RNs) appear to delay or forego the transition away from paper, consistent with existing theory and research in industrial relations and institutional economics. However, this relationship is fully mediated by a hospital’s payer mix: those serving a larger share of less lucrative, elderly, disabled, and indigent patients are more likely to adopt EHRs if they are unionized than if they are not, a result that holds even at the median payer mix. Indeed, this accords with research on the interplay of labour and technology as the aforementioned dynamics are driven entirely by RN-exclusive bargaining units for whom the new IT serves as a complement rather than as a substitute in production. Given the outsized role that unions play in the U.S. healthcare sector, the overall sluggish performance of the sector, and the expectations that policymakers have for EHRs, evidence that these unions are welfare-enhancing should be welcome news

The influence of unions on companies’ CSR profiles: more internal policies and programs, but not always at the expense of external endeavors.

This paper compares the CSR profiles of companies operating under the same macroeconomic institutions but with different levels of union density. Drawing from stakeholder and neo-institutional theories that distinguish between internal and external actions, this paper finds that companies initially have to substitute internal for external CSR. After some experience dealing with unions, companies can complement both actions. There is perhaps a reinforcement of mutual trust and loyalty, and has implications for managerial prerogatives

Do heavily-unionized companies compensate their CEOs less in periods of financial distress? Evidence from Canadian companies during the financial crisis.

This paper studies the strategic interaction between employee stakeholders, in particular labor unions, and top management, and evaluates the effect of the two parties’ inherent competitive rent-seeking behavior on CEO pay. Using a panel of firms listed on the S&P/TSX composite index, this paper finds that CEO compensation withstood the financial crisis despite lower and even negative corporate performance. Further, heavily-unionized companies were associated with higher CEO pay in terms of non-equity elements such as salary and pension allocations. The presence of unions had no observed effect in reducing bonuses, stock options, and restricted stock units. These findings have implications for the debate on income inequality, and the power of unions to bring about change

Contract Innovation in Germany: An Economic Evaluation of Pacts for Employment and Competitiveness

Pacts for employment and competitiveness are an integral component of the ongoing process of decentralization of collective bargaining in Germany, a phenomenon that has been hailed as key to that nation's economic resurgence. Yet little is known about the effects of pacts on firm performance. The evidence largely pertains to employment and is decidedly mixed. This article investigates the association between pacts and six outcome indicators using a framework in which the controls comprise establishments that negotiated over pacts but failed to reach agreement on their implementation. An extensive set of robustness checks are run to test the sensitivity of the key findings of the model. There is no suggestion of pacts negatively impacting any of the selected measures of establishment performance. Rather, the evidence points to some positive short- and medium-run effects on firm average wages and possibly employment and innovation as well

Union effects on product and technological innovations

We present theoretical and empirical evidence challenging early studies that found unions were detrimental to workplace innovation. Under our theoretical model, unions prefer product innovation to labor-saving technological process innovation, thus making union wage bargaining regimes more conducive to product innovation than competitive pay setting. We test the theory with population-representative workplace data for Britain and Norway. We find strong support for the notion that local bargaining leads to product innovation, either alone or together with technological innovation.acceptedVersio