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March 29th Presentation “What do Unions do? Wages, Incentives, and Investments”

Please join us on March 29th  at 1:00 PM EST for the next installment of the FSRDC Presentation Series. Dr. Liu Yang from the University of Maryland will present her RDC research titled, “What do Unions do? Wages, Incentives, and Investments.”

Abstract: The study of unions in finance has centered on their impact on the distribution of cash flows. Using plant-level data from the Census Bureau, we show that unionized plants have weaker worker incentives in addition to paying higher wages and benefits. As a result, union plants are 22% more likely to exit, have almost 40% lower sales growth rates than non-unionized plants conditional on survival, and invest less. These effects are less pronounced in markets with a high concentration of labor, where unions counter monopolistic employers on the wage and employment side. We also find spillover effects: partially unionized firms pay higher wages and have less effective incentives in their non-unionized plants than their peers. Spillover effects reduce employment and efficiency and potentially reduce the value of acquisitions and decrease the firm’s appeal as a target, thereby reducing the market’s allocative efficiency for corporate assets. By utilizing recent changes in state-level right-to-work laws, we provide causal evidence that states that pass such laws experience increased growth in employment and investment.

Date and time:
Wednesday, Mar 29, 2023 1:00-2:00 pm | EST
Join link:
Webinar number, if needed: 2762 068 4056
Webinar password, if needed: #Census1