RecensionsAnglaisBook Reviews

The Economics of Trade Unions: A Study of a Research Field and its Findings, By Hristos Doucouliagos,Richard B. Freeman and Patrice Laroche (2017) London: Routledge, 190 pages. ISBN: 978-1-13888-830-2[Notice]

  • Bruce E. Kaufman

…plus d’informations

  • Bruce E. Kaufman
    Professor of Economics, Georgia State University, United States of America

This book by Hristos Doucouliagos, Richard Freeman and Patrice Laroche provides an in-depth and impressively executed meta-analytic investigation and synthesis of the econometric evidence produced on the economic effects of trade unions since publication of the landmark volume What Do Unions Do? (WDUD) in 1984 by Freeman and Medoff. For Freeman, the book is a fitting tribute to one of the most famous and enduring works ever written on unions and, similarly, for Doucouliagos, Laroche and their colleague Stanley, it is a fitting tribute to their pioneering work on use of meta-analysis in labour economics. One of the standout innovations of WDUD (1984) was to broaden econometric analysis of unions beyond the traditional topic of wage effects to include a variety of non-wage outcomes, such as productivity level and growth, capital investment, employee turnover, job satisfaction and firm profitability. This broader palette of union effects was inspired, in turn, by Freeman and Medoff’s equally innovative expansion of the traditional monopoly model of union wage effects to include collective voice and institutional response effects. They presented the model as capturing the “two faces of unionism”—a negative monopoly wage effect on economic efficiency/performance and positive voice effect from lower turnover, improved working conditions, reduced wage inequality and more effective workplace cooperation—and argued the net effect of unions on the economy can thus be positive, negative, or neutral depending on the quantitative size of the various monopoly and voice outcomes. The most eye-catching and controversial econometric finding in WDUD was that unions have a positive effect on firm-level productivity, a finding which, if substantiated, shifts the economic verdict on union economic effects toward a more neutral or even positive direction. Publication of WDUD (1984) spurred a very large follow-up empirical literature on the various non-wage effects of unions with analysis expanded beyond the U.S. to include a number of other countries and also disaggregated by industry/sector. The diversity among non-wage outcome variables and substantial heterogeneity in findings across studies has made it difficult in the three decades since WDUD to form a reliable estimate of the degree to which Freeman and Medoff’s original results and conclusions have withstood the test of time. The purpose of the present volume by Doucouliagos, Freeman and Laroche (henceforth DFL) is to use advanced techniques of meta-analysis to synthesize from this extensive empirical literature “best estimate” values of the mean union effect on five outcome variables related directly or indirectly to the overall union effect on firm productivity and performance. They are: productivity level, productivity growth, investment in physical capital and research/development (innovation), employee behavioral responses (turnover, job satisfaction, organizational commitment) and firm profitability. For the meta-analysis, DFL comb the literature and assemble 301 studies that report 2,257 effect estimates. Chapter two of the book provides overview and context with a statistical bibliographic analysis of the empirical literature on union non-wage effects since publication of WDUD. Chapters three through seven report the meta-analytic results for the five productivity/performance-related outcomes. Chapter eight summarizes the findings, the implications for WDUD three decades on, and implications for union research and policy writ large. Table 8.1 in the book handily summarizes the main results of the chapter-by-chapter meta-analysis. For productivity level, unions in manufacturing have no effect in the US, a negative effect in the UK, and positive effect in developing countries, while for non-manufacturing (e.g., construction and education), the union effect on productivity is positive. For productivity growth, no union effect is found; for profitability, a negative effect is found; for physical capital investment, a negative effect is found; and for job satisfaction, no effect is found. DFL …