Unions Hurt Young Workers
March 4, 2003
Over the past 30 years, unemployment rates in some European countries have jumped from around 3 percent to nearly 11 percent. This rising unemployment is concentrated among young and old workers, as well as women. Some economists say that unions are to blame.
According to an analysis of data from 17 countries from 1960 to 1996 -- after controlling for demographic factors, country effects and institutional factors -- researchers have found:
- More union involvement in setting wages significantly decreases the employment rate of young and older individuals as compared to prime-age workers.
- Additionally, it raises female unemployment relative to male unemployment.
Researchers theorize that prime-age workers accept greater unemployment for higher wages. Consequently, the unions attempt to focus unemployment on groups where it is less costly.
These groups are likely to be youth, older individuals and women, all of whom have more extensive nonmarket uses of time than prime age males do: household work for women, schooling for youth and retirement for older individuals.
Source: Marie Bussing-Burks, "Whose Employment is Affected by Unions?" NBER Digest, December 2002; based upon Giuseppe Bertola, Francine Blau and Lawrence Kahn, "Labor Market Institutions and Demographic Employment Patterns," Working Paper 9043, July 2002, National Bureau of Economic Research..
For NBER Digest text
For NBER abstract
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