THE DYNAMIC RELATIONSHIPS OF UNIONIZATION ON PRODUCTIVITY (R&R at Industrial Relations)
with: Esteban Puentes
Abstract: We study how firm outcomes evolve around unionization in Chile, with 2014–2022 panel data. In a matched event-study design, unionizing firms are compared with never-unionized firms matched on prior levels and trends of value added and capital and on workforce composition; both follow similar pre-event paths. Value added and TFP are similar in the first years after unionization and higher four and five years later, but these late differences rest on the earliest cohort and decline after correcting for selective attrition. Mean wages are higher and the profit rate does not fall. No matched specification suggests lower productivity after unionization.
with Dante Contreras, Fabián Duarte and Melanie Saavedra
WORK IN PROGRESS
MARKETS FOR WORKER REPRESENTATION: EVIDENCE FROM CHILE
with Christopher Kaiser
Abstract: We study how competition among unions affects wages when multiple unions may represent workers within the same firm. Motivated by Chile's institutional setting, we develop a model of differentiated worker preferences, bilateral union--firm bargaining, and union entry financed by membership dues. Additional unions strengthen incentives to negotiate higher wages to attract future members, but fragment bargaining leverage by dividing workers across smaller organizations. The model characterizes these opposing forces and compares free entry with a policy allowing at most one union, as well as with the worker welfare maximizing number of unions. Our empirical work draws on Chilean firm surveys and union administrative records to describe worker representation markets and assess how these mechanisms can be taken to the data.
UNIONS AND THE DISTRIBUTIONAL EFFECTS OF MARKET POWER
Abstract: This paper examines whether the decline of labor unions may have amplified the disconnect between productivity and wages in the United States as product market power increased. Using Compustat data matched to union election records from the National Labor Relations Board, I document that union certification is associated with declining markups and profit rates among manufacturing firms unionized after 1981. These declines are accompanied by an increase in production costs relative to sales and are consistent with unions enabling workers to capture part of firm rents. Comparable patterns are not observed among firms unionized in 1981 or earlier. I then estimate a general equilibrium model with product and labor market power and collective bargaining. Estimated workers' bargaining power falls sharply after 1981 and remains below its earlier levels. Counterfactual exercises indicate that maintaining bargaining power at its highest estimated pre-1981 level would have closed around 10--15% of the gap between the baseline labor share and the model's efficient benchmark, with gains similar to those from removing monopsonistic distortions from the mid-1990s onward. Raising bargaining power to the point workers keep half of the profits made by the firm, would have closed around 40--45% of this gap, approaching the gains from removing monopolistic distortions. These findings suggest that declining bargaining power may have contributed to wage stagnation by limiting workers' ability to share in firm rents, highlighting the role of labor institutions in shaping the distributional effects of market power.
DISTRIBUTIONAL IMPACT OF UNION STRIKES
with Federico Huneeus
PUBLICATIONS
with Dante Contreras | Economics of Education Review, Volume 91, Decemeber 2022
with Dante Contreras | IDB's Discussion Paper Series N IDB-DP-825, July 2020
Advisor: Esteban Puentes | Master's thesis
POLICY BRIEFS
Millennium Nucleus of Social Development Study Center (DESOC), March 2021