Dissatisfied Union Workers: Sorting Revisited
| Published date | 01 September 2015 |
| Date | 01 September 2015 |
| DOI | http://doi.org/10.1111/bjir.12090 |
Dissatisfied Union Workers:
Sorting Revisited
Colin P. Green and John S. Heywood
Abstract
A substantial literature argues that the reported job dissatisfaction of union
members is spurious. It reflects either the sorting of dissatisfied workers into
union membership or the sorting of union recognition into worse jobs. We
contribute by presenting the first panel data estimates that hold constant first
worker fixed effects and then worker in job fixed effects. The estimates demon-
strate that covered union members typically report greater dissatisfaction even
when accounting for sorting in both dimensions. At the same time, cross-
sectional evidence of less satisfied covered non-members and uncovered
members vanishes when accounting for sorting.
1. Introduction
The last two decades have witnessed an explosion of interest by economists in
worker job satisfaction. While studying the influence of unions on job satis-
faction has been a part of that explosion, it actually predates it (Borjas 1979;
Freeman 1978; Hamermesh 1977). The longevity of this interest stems from
what many saw as a basic paradox. Unions are associated with better earn-
ings, better benefits, and arguably better means for dealing with worker
grievances, but at the same time unions appeared associated with lower job
satisfaction. This gave rise to a wide variety of explanations for the apparent
paradox, and interest in these explanations continues to the present (Artz
2010, 2012; Bryson et al. 2010; Powdthavee 2011). One vein of explanations
concludes that while unions may be associated with dissatisfaction, unions do
not cause dissatisfaction. The findings and their implications are diverse and
often contradictory, justifying further empirical investigation.
Many resolutions of the paradox fall within two broad categories of argu-
ments related to the sorting of workers and of union recognition itself. First,
Colin P. Green is at Lancaster University. John S. Heywood is at the University of Wisconsin —
Milwaukee.
© 2014 John Wiley & Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
British Journal of Industrial Relations
53:3 September 2015 0007–1080 pp. 580–600 doi: 10.1111/bjir.12090
unions attract inherently dissatisfied workers, and once this is corrected for
unions are not associated with dissatisfaction. The union workers would have
been dissatisfied even in non-union jobs. Second, union jobs are genuinely
worse, and the dissatisfaction reflects negative characteristics that outweigh
the improved wages, benefits and protection. Jobs that are genuinely worse
attract unions, and once this is corrected for unions are not associated with
dissatisfaction. Workers in these types of jobs who were not members of a
union would be just as dissatisfied.
The past statistical methodologies for addressing sorting rely on either
instrumental variables to identify exogenous variation in unionization
(Bryson et al. 2010) or the use of longitudinal data to hold worker effects
constant (Artz 2010, 2012; Powdthavee 2011). Yet many union status
changes observed in longitudinal data occur on the job (not because of a
worker changing jobs). To the best of our knowledge, the possibility of union
status being associated with specific jobs has not been fully controlled for in
typical longitudinal estimates. Changes in recognition at existing workplaces
have been recognized as a large source of variation in union coverage in the
UK (Blanden et al. 2006; Machin 2000).1In addition, by comparison with US
agency laws that closely tie coverage to membership, there exists a weaker
connection in the UK between coverage status and membership. This sug-
gests that individual workers may more easily choose to change their mem-
bership status on the job even without changes in recognition. Moreover, as
we will suggest, those longitudinal studies that focus on only workers enter-
ing union status miss transitions out of union status and also run the risk of
confusing new jobs (and any associated increase in satisfaction) with union-
ization. Thus, we use panel data for the UK to account first for worker-
specific fixed effects and then for worker in job fixed effects in estimates of the
influence of all changes into and out of union status on job satisfaction. The
first estimate holds constant each worker while the second replaces this with
an estimate that holds constant each job held by each worker. The influence
on job satisfaction in the latter estimate is identified by the change in union
status in the same job for a given worker.
The estimates indicate that neither the attraction of inherently dissatisfied
workers nor the greater likelihood of worse jobs being unionized completely
explain the observed negative association between unions and job dissatis-
faction. While there is variation depending on the measures of unionization
and job satisfaction, covered union members typically report significantly
less job satisfaction.
2. Setting the context
The idea of union voice sits at the base of many explanations of union
discontent. Trade unions provide a collective voice alternative to quitting
(Freeman and Medoff 1984) and must encourage discontent as a prerequisite
for successfully making demands of the firm (Booth 1995). Borjas (1979)
© 2014 John Wiley & Sons Ltd/London School of Economics.
Dissatisfi ed Union Workers 581
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