District elections and the power of municipal employee unions

Very little prior research has been devoted to the effects of the institutional structure of local government on public sector labor markets. This study addresses the differential effects of the two main systems used to elect city council members — district versus citywide (at-large) elections. The study hypothesizes that, in district-election cities, municipal employees, especially those who are unionized, face a lower cost of influencing city council candidates and, consequently, will have greater power to influence employment conditions. To test this hypothesis, data on U.S. cities over 25,000 population are used to estimate both reduced form and structural wage and employment equations. The results are consistent with the basic hypothesis: district elections provide a more fertile ground for municipal employees, especially those organized in unions, to affect their employment conditions. The authors acknowledge the helpful comments of Tim Sass, Tom Means, and participants in a session at the 1991 Public Choice Society meetings.