Collective bargaining has negative impact on students’ future earnings and employment



By 11/17/2015

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WINTER 2016 / VOL. 16, NO. 1

Contact:
Michael Lovenheim: 607-255-0705, mfl55@cornell.edu, Cornell University
Jackie Kerstetter: 814-440-2299, jackie@alessicommunication.com, Education Next Communications Office

Collective bargaining has negative impact on students’ future earnings and employment
New study offers first evidence of the long-term effects of duty-to-bargain laws

November 12, 2015—Almost as soon as the month-long East St. Louis, Ill., teachers’ strike ended last week, news broke of a possible Chicago teachers’ strike looming in the near future. Despite agreement that collective bargaining by teachers’ unions affects public education, whether the impacts on students are positive or negative has remained unclear. In a new Education Next article “A Bad Bargain: How teacher collective bargaining affects students’ employment and earnings later in life,” Michael Lovenheim and Alexander Willén of Cornell University present the first evidence that students’ exposure to a duty-to-bargain law while in elementary and secondary school lowers future earnings and leads to fewer hours worked, reductions in employment, and decreases in labor force participation.

Lovenheim and Willén found that students who spent all 12 years of elementary and secondary school in a state with a duty-to-bargain law earn an average of $795 less per year as adults than students who were not exposed to collective bargaining laws during the same time period. They also work half an hour less per week on average; are 0.9 percentage points less likely to be employed; tend to work in occupations requiring lower levels of skill; and tend to earn lower wages.

If $795 less earnings per year doesn’t seem like much, think again. “This individual effect translates into a large overall loss of earnings for the nation as a whole. In particular, our results suggest a total loss of $196 billion per year accruing to those who were educated in the 34 states with bargaining laws,” says Lovenheim. [For more details on earnings loss, see the online article’s interactive map “Collective Bargaining Across the States” for a breakdown of estimated 2014 earnings loss.]

Lovenheim and Willén analyzed data from the National Bureau of Economic Research on duty-to-bargain laws in each state since 1955 and data from the 2005-2012 American Community Survey, which details educational attainment and labor market success in a representative sample of adults in each state. To control for factors unrelated to collective bargaining, the researchers analyzed changes in student outcomes between birth cohorts within the same state before and after duty-to-bargain laws were adopted. They focused on the birth cohorts who would have attended school between 1959 and 1987, during which time duty-to-bargain laws were adopted in 34 states and prohibited in seven.

Critics of teacher collective bargaining claim that it shifts school resources disproportionately to teachers and makes it difficult to fire low-performing teachers. Findings from this study may support that argument.

The researchers also emphasize that it is imperative to understand why collective bargaining has negative impacts on students’ future employment and earnings, which is not immediately clear. “Although our results do not necessarily tell us what would happen if we eliminated teacher collective bargaining today in America, I do think they argue for developing policies to alter certain features of teacher collective bargaining in order to avoid the negative consequences our research documents. My hope is this work spurs future research on this question to help guide policy in a positive direction,” says Lovenheim.

A Bad Bargain: How teacher collective bargaining affects students’ employment and earnings later in life” will be available Tuesday, November 17 on educationnext.org and will appear in the Winter 2016 issue of Education Next, on newsstands by November 20. The online article includes an interactive map with a state-by-state breakdown on duty-to-bargain laws, total earnings losses as a result of those laws, and additional details about teacher unionization.

About the Authors: Michael F. Lovenheim is associate professor of policy analysis and management at Cornell University and a faculty research fellow at the National Bureau of Economic Research. Alexander Willén is a doctoral student in policy analysis and management at Cornell University. The authors are available for interviews.

About Education Next: Education Next is a scholarly journal committed to careful examination of evidence relating to school reform, published by the Hoover Institution at Stanford University and the Harvard Program on Education Policy and Governance at the Harvard Kennedy School. For more information, please visit educationnext.org.




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