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State collective bargaining laws and public-sector pay (Brunner & Ju, 2019)

Absence of conflict of interest.

Citation

Brunner, E. J., & Ju, A. (2019). “State collective bargaining laws and public-sector pay.” Industrial and Labor Relations Review, 72(2), 480-508.

Highlights

  • The study’s objective was to examine the impact of collective bargaining for public sector workers on hourly earnings and wages. 

  • The authors used a nonexperimental design to compare the wages of public sector workers living in states where collective bargaining is permitted and states where it is not, using data from the 2005 to 2015 American Community Survey (ACS). The design focuses on a comparison of “commuting zones” that span state borders with and without collective bargaining. 

  • The study found public sector workers in states with mandatory collective bargaining laws had higher hourly wages than similar workers from the same commuting zones in states that prohibit collective bargaining.  

  • This study receives a moderate evidence rating because it is a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects on public sector employees’ wages are attributable to statewide laws affecting workers’ ability to bargain collectively, but other factors might also have contributed.

Intervention Examined

Collective Bargaining Policies for Public Sector Employees

Features of the Intervention

Collective bargaining laws govern how public sector workers and their unions can negotiate wages and other terms of employment with their employers. Across the U.S., the rights of public sector workers to collectively bargain with state and local governments over wages and compensation varies substantially. Some states have laws that allow for collective bargaining, while others explicitly prohibit this practice. 

This study classified states based on the level of restrictions they have imposed on public sector employees’ ability to enter into or opt out of collective bargaining agreements. In states that require collective bargaining, state and local governments must negotiate with public employees in good faith if those employees form a union and seek to collectively bargain. In states that prohibit collective bargaining, state laws explicitly or implicitly forbid state and local governments from negotiating with public sector unions.

Features of the Study

The study used a nonexperimental design to estimate the impact of collective bargaining laws on the wage differential between public- and private-sector workers. The authors develop the treatment and comparison groups by identifying commuting zones that cross state borders, where one of the bordering states permits collective bargaining and the other prohibits it. Within these commuting zones, study authors then compare the wage differential between public and private sector workers for those in the state permitting collective bargaining (the treatment group) to the corresponding differential in the non-collective bargaining state (the comparison group).  

The study sample includes workers between the ages of 18 to 64 who worked full-time (30-70 hours per week) for at least 50 weeks in the prior 12 months.  For preferred analyses, the sample includes 370,079 workers who work in commuting zones that cross state borders.  

The primary data source used is the Public Use Microdata Sample (PUMS) from the 2005 to 2015 American Community Survey (ACS). The ACS collects detailed demographic and labor information on workers, including wages, number of weeks worked, years of education attainment, and workplace location. Study authors supplemented this data with information on state collective bargaining laws from prior research conducted under a separate study (Sanes and Schmitt 2014). There were 21 such commuting zones included in the study.  The authors use a statistical model to compare wages in states that permit collective bargaining to wages in states that prohibit collective bargaining.  Study authors focus on comparing how collective bargaining laws impact the wage differential between similar public and private sector workers in the same local labor markets. 

Study Sites

There were 21 commuting zones that span state borders with and without collective bargaining requirements for public sector workers included in the study.  

Findings

Earnings and Wages 

  • The study authors found that mandatory collective bargaining laws increased the wages of public sector workers by 6.1 percentage point.

Considerations for Interpreting the Findings

The authors note that, because primary analyses are limited to commuting zones that span states with differing collective bargaining laws, results may not be generalizable to other settings. 

Causal Evidence Rating

This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects on public sector employees’ wages are attributable to statewide laws affecting workers’ ability to bargain collectively, but other factors might also have contributed.  

Reviewed by CLEAR

March 2022