Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp011c18df784

 Title: Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961-1999 Authors: Mas, AlexandreLee, David S. Keywords: UnionizationRegression Discontinuity Designevent study Issue Date: 1-Jan-2009 Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 547 Abstract: We estimate the effect of new unionization on firms’ equity value over the 1961-1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market data. Event-study estimates show an average union effect on the equity value of the firm eq uivalent to a cost of at least \$40,500 per unionized worker. At the same time, point estimates from a regression-discontinuity design – comparing the stock market impact of close union election wins to close losses – are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings. Using the magnitudes from the analysis, we calibrate a structural “median voter” model of endogenous union determination in order to conduct counterfactual policy simulations of policies that would marginally increase the ease of unionization. URI: http://arks.princeton.edu/ark:/88435/dsp011c18df784 Appears in Collections: IRS Working Papers

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