The Impact of Unionization on Establishment Closure: A Regression Discontinuity Analysis of Representation Elections

Abstract

Using data on more than 27,000 establishments (1983-1999) in the United States, this paper produces estimates of the causal effect of unionization of employer closure by exploiting the fact that most employers become 'unionized' as a partial consequence of a secret ballot election among the workers. If employers where unions barely won the election (e.g. by one vote) are ex ante comparable in all other ways to employers where unions barely lost (by one vote), differences in their subsequent outcomes should represent the true impact of union recognition. The regression discontinuity analysis finds little or no union effect on short- and long-run employer survival rates over 1- to 18-year horizons. We thus conclude that evidence of large effects of unions would more likely be found 1) along the within-employer (intensive margin) of employment and/or 2) in analyses of union threat effects.