The Effects of Collective Bargaining in the Public Sector

New research seems to show adverse consequences from allowing collective bargaining for teachers and cops

What are the long-run consequences of allowing public sector unions to engage in collective bargaining? Less accountability and poorer performance according to some recent studies.

"The Effect of Collective Bargaining Rights on Law Enforcement: Evidence from Florida," by University of Chicago law professors Dhammika Dharmapala, Richard H. McAdams, and John Rappaport, suggests that police unionization may result in greater police misconduct. Here is the abstract:

Growing controversy surrounds the impact of labor unions on law enforcement behavior. Critics allege that unions impede organizational reform and insulate officers from discipline for misconduct. The only evidence of these effects, however, is anecdotal. We exploit a quasi-experiment in Florida to estimate the effects of collective bargaining rights on law enforcement misconduct and other outcomes of public concern. In 2003, the Florida Supreme Court's Williams decision extended to county deputy sheriffs collective bargaining rights that municipal police officers had possessed for decades. We construct a comprehensive panel dataset of Florida law enforcement agencies starting in 1997, and employ a difference-in-difference approach that compares sheriffs' offices and police departments before and after Williams. Our primary result is that collective bargaining rights lead to about a 27% increase in complaints of officer misconduct for the typical sheriff's office. This result is robust to the inclusion of a variety of controls. The time pattern of the estimated effect, along with an analysis using agency-specific trends, suggests that it is not attributable to preexisting trends. The estimated effect of Williams is not robustly significant for other potential outcomes of interest, however, including the racial and gender composition of agencies and training and educational requirements.

Turning from cops to teachers, a session at the annual meeting of the American Economic Association focused on "New Evidence on the Effects of Teachers' Unions on Student Outcomes, Teacher Labor Markets, and the Allocation of School Resources." This session featured several papers, two of which found (unsurprisingly) that unionization tends to result in higher salaries for teachers. The more interesting paper, however, was "The Long Run Effects of Teacher Collective Bargaining" by Cornell researchers Michael Lovenheim and Alexander Willen which found that teacher unionization has "adverse long-term labor market consequences for students." Here is the abstract:

This paper presents the first analysis of the effect of teacher collective bargaining on long-run labor market and educational attainment outcomes. Our analysis exploits the different timing across states in the passage of duty-to-bargain laws in a difference-in-difference framework to identify how exposure to teacher collective bargaining affects the long-run outcomes of students. Using American Community Survey (ACS) data linked to each respondent's state of birth, we examine labor market outcomes and educational attainment for 35-49 year olds. Our estimates suggest that teacher collective bargaining worsens the future labor market outcomes of students: living in a state that has a duty-to-bargain law for all 12 grade-school years reduces earnings by $800 (or 2%) per year and decreases hours worked by 0.50 hours per week. The earnings estimate indicates that teacher collective bargaining reduces earnings by $199.6 billion in the US annually. We also find evidence of lower employment rates, which is driven by lower labor force participation, as well as reductions in the skill levels of the occupations into which workers sort. The effects are driven by men and nonwhites, who experience larger relative declines in long-run outcomes. Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining leads to sizable reductions in measured cognitive and non-cognitive skills among young adults. Taken together, our results suggest laws that support collective bargaining for teachers have adverse long-term labor market consequences for students.

I suspect both studies will prompt significant debate.