The Impact of Unionization on Establishment Closure: A Regression Discontinuity Analysis of Representation Elections

Using data on more than 27,000 establishments (1983-1999) in the United States, this paper exploits an institutional feature of the union organizing process in order to generate an estimate of the causal effect of unionization on the probability of establishment closure. In the U.S., most establishments become “unionized” as a partial consequence of a secret ballot election among the workers. If employers where unions barely won the election are ex ante comparable in all other ways to employers where unions barely lost, differences in their subsequent outcomes should represent the true impact of union recognition. The regression discontinuity analysis finds a negligible effect on shortand long-run establishment survival rates – suggesting that distortions that are necessarily implied by the monopoly union model would more likely be found along the intensive margin of employment. * Matthew Butler and Francisco Martorell provided outstanding research assistance. We thank David Card for helpful discussions, and are grateful to Hank Farber for providing election data.