Working Papers

Abstract: This paper identifies the effects of firms on the career advancement of blue-collar workers and interprets these effects through the mechanism of employer learning. I use administrative data on the universe of Brazilian formal employment to study vertical promotions from production jobs to supervisory jobs, which are an important source of wage growth for most young workers. By comparing workers around job-to-job transitions, I show that differences in average firm promotion rates reflect persistent differences in the effects of firms on workers. Workers who move to a high promotion firm become substantially more likely than other job movers to be promoted, but they are even more likely to leave formal employment altogether. Correspondingly, their average long-term wage gains are negligible. I explain these effects using a model where firms differ in the rate they learn about the abilities of employed workers. High learning firms improve the efficiency of matching between workers and jobs, but these firms also exacerbate the adverse selection of unemployed workers and increase occupational wage inequality. By quantifying the parameters of the model using my estimated effects, I show that skill misallocation remains high and ex-post market power for employers can be large.

Abstract: We study the effect of private-sector unionization on establishment employment and survival. Specifically, we analyze National Labor Relations Board (NLRB) union elections from 1981 to 2005 using administrative Census data on the universe of establishments in the U.S. Our empirical strategy extends a difference-in-differences design with regression discontinuity extrapolation methods. This strategy allows us to estimate treatment effects that include elections that win by large margins of support. We show that unionization decreases an establishment's employment and likelihood of survival. We hypothesize that two reasons for these effects are firms' ability to avoid working with new unions and managers' opposition to unions. We test this hypothesis for unionization in manufacturing. There, the negative effects are significantly larger for elections at multi-establishment firms. Additionally, after a successful union election at one establishment, employment increases at the firms' other establishments. Both pieces of evidence are consistent with firms avoiding new unions by shifting production from unionized establishments to other establishments. Finally, we find larger declines in employment and survival following elections when managers were more opposed to the union. To support this, we estimate treatment effect heterogeneity based on two proxies for managers' opposition: delays during the election process and the lack of other unionized establishments at the firm. Taken together, our results are consistent with firms' union avoidance tactics contributing to the overall negative effects of unionization.