What unions do: Insights from economic theory

Conclusion I have attempted to distill a quite sizable body of literature written by modern economists on the theory of labor unions, with particular emphasis given to the “two faces” view of unions developed by Freeman and Medolf in What Do Unions Do? Many important ideas and contributions have necessarily been omitted, but hopefully the main contours and implications are captured.     

Gender-earnings differentials using quantile regressions

I employ quantile regressions to analyze the size, components, and nature of the gender-earnings differentials over the entire conditional distribution of earnings, using data from Singapore. This approach allows more focused conclusions about the nature of genderearnings differentials. Incorporating the quantile regression approach to the Oaxaca-Blinder decomposition allows the localization of gender discrimination to particular quantites of the earnings distribution and permits more targeted policy intervention.     

How race affects dismissals of college football coaches

We employ a discretetime hazard model and a Blinder-decomposition approach to explore the possibility of racial discrimination in the dismissal and retention of college football coaches by university administrations. A rich data set consisting of 81 institutions over an 11-year period (1990–2000) that contains, in addition to a coach's race, variables on cumulative winning records, annual on-the-field improvements, and pre-/post-season game participation by institutions and their coaches is employed. Our study finds that black coaches, on average, face a dismissal probability that is 9.6 percentage points below that of their nonblack counterparts, ceteris paribus, suggesting that black head coaches may be the beneficiaries of favorable treatment by university administrators. Such a result likely stems from universities ' approach to social concerns involving race and gender issues. This finding also fits a construct that considers workplace discrimination as multi-dimensional. For example, black representation in the college football coaching ranks may be disproportionately low, possibly as a result of discrimination. However, once hired, black coaches are given more time to succeed than nonblacks, other things constant.     

The future of public sector unionism in the United States

The future of nonpublic safety, non-teacher, non-federal public sector unions is bright. As a result of past success, the unions, led by AFSCME, have an organizing culture and sufficient power within the sector to maintain and increase density. However, the challenges that lie ahead in the 21st century will surely test the strength of AFSCME and the other public service unions. The large gains in public employee membership achieved in the last third of the 20th century are not likely to come with the relative ease with which they were achieved during that period. The remaining unorganized workers are in locations and occupations that have not been historically fertile ground for unions, public or private. In addition, the threat of privatization of jobs requires public unions to re-think their traditional strategies and organize in the more hostile private sector while simultaneously protecting the public sector from attacks. The public sector unions recognize that they have a tenuous grasp on their relatively strong position and must organize to maintain and strengthen their position. Absent dramatic changes in federal private sector labor law, and adoption of numerous public sector labor laws, the resources necessary for organization will be tremendous. The future is bright for the public sector unions only because they have demonstrated a willingness to adapt to change, make sacrifices, and deploy sufficient resources to achieve growth. The views herein are the author’s and do not necessarily represent the views of AFSCME.     

Unresolved Conflicts in the Regional Security System: The Case of the South Caucasus

The collapse of the USSR was accompanied by transformation of the South Caucasian latent ethnopolitical conflicts into local wars. Today the situation in the area of the conflicts is “neither war, nor peace”. Three unresolved conflicts of the South Caucasus can be considered as one of the most serious obstacles for establishing a regional security system.The article gives the general characteristics of these conflicts, the trends of their development, taking into account the time factor, and analyzes the behavioral models of the main players – de jure recognized and unrecognized de facto states of the South Caucasus. The basic objective of the main players should be to keep the situation on a level preventing the resumption of the armed conflicts. The attempts of forced resolution of the conflicts are fraught with destabilization of the situation not only in the area of any of these conflicts but in the whole region.     

Deposit Insurance,Institutions, and Bank Interest Rates

Many recent institutional reforms of the financial system have relied on the introduction of an explicit scheme of deposit insurance. This instrument aims at two main targets, contributing to systemic stability and protecting depositors. However, it may also affect the interest rate spread in the banking system, which can be viewed as an indicator of either inefficiency or market power in this financial segment. This paper provides an empirical investigation of the effect of deposit insurance and other institutional and economic variables on bank interest rates across countries. We find that deposit insurance increases the lending–deposit spread in banking. The main effect seems to arise not from the deposit side though, but from an increase in the lending rate. We interpret this result as evidence of the presence of moral hazard problems related to this instrument. We also find that higher quality of institutions is associated with lower spreads, thus contributing to eroding sources of market power in the banking sector.     

Reconsidering union wage effects: Surveying new evidence on an old topic

I examine evidence on private sector union wage gaps in the United States. The consensus opinion among labor economists of an average union premium of roughly 15 percent is called into question. Two forms of measurement error bias downward standard wage gap estimates. Match bias results from Census earnings imputation procedures that do not include union status as a match criterion. Downward bias is roughly equal to the proportion of workers with imputed earnings, currently about 30 percent. Misclassification of union status causes additional attenuation in union gap measures. This bias has worsened as private sector density has declined, since an increasing proportion of workers designated as union are instead nonunion workers. Corrections for misclassification and match bias lead to estimated union gaps substantially higher than standard estimates, but with less of a downward trend since the mid 1980s. Private sector union gaps corrected for these biases are estimated from the CPS for 1973–2001. The uncorrected estimate for 2001 is .13 log points. Correction for match bias increases the gap to .18 log points; further correction for misclassification bias, based on an assumed 2 percent error rate, increases the gap to .24. Reexamination of the skill-upgrading hypothesis leads to the conclusion that higher union gap estimates are plausible. The conventional wisdom of a 15 percent union wage premium warrants reexamination.