Labor Unions Scale back Product High quality

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A really good paper in Administration Science by Kini, Shen, Shenoy and Subramanian finds that labor unions scale back product high quality. Two strengths of the paper. First, the authors have comparatively goal measures of product high quality from hundreds of product recollects mandated by the FDA, the Client Product Security Fee and the Nationwide Freeway Site visitors Security Administration masking many various industries. Second the authors use 3 totally different strategies. First, they discover that unionized companies usually tend to have recollects than non-unionized companies (a easy distinction in means topic to many potential cofounds however I nonetheless wish to see the uncooked information), second they discover that in a panel mannequin with business and 12 months mounted results and different controls that companies that are extra unionized have a higher frequency of product recollects. Lastly they discover that companies the place the union simply barely gained the vote usually tend to have subsequent product recollects than companies for which the union simply barely misplaced the vote–a regression discontinuity research.

On this paper, we research the influence of labor unions on product high quality failures. We use a product recall as our measure of high quality failure as a result of it’s an goal metric that’s relevant to a broad cross-section of industries. Our evaluation employs a union panel setting and shut union elections in a regression discontinuity design framework to beat identification points. Within the panel regressions, we discover that companies which can be unionized and people who have increased unionization charges expertise a higher frequency of high quality failures. The outcomes receive even at a extra granular institution degree in a subsample during which we are able to establish the manufacturing institution related to the recalled product. When evaluating companies in shut elections, we discover that companies with shut union wins are adopted by considerably worse product high quality outcomes than these with shut union losses. These outcomes are amplified in non–right-to-work states, the place unions have a comparatively higher affect on the workforce.

The authors put extra weight on monetary strains attributable to unionization as a mechanism whereas my story could be that unionization prevents companies from disciplining shoddy employees and that results in decrease product high quality. Be aware that my concept would additionally cowl lecturers unions which the creator’s mechanism wouldn’t.

Hat tip: Luke Froeb.




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