"The Effects of Import Competition on Unionization"

New research by IIES Assistant Professor Mitch Downey published in American Economic Journal: Economic Policy.

Mitch Downey. Photo: Hanna Weitz/IIES, Stockholm University
Mitch Downey

For years, many have speculated that the rise of globalization and import competition with low-wage countries accelerated the decline of US labor unions.

In newly published work, Mitch Downey (IIES) and John Ahlquist (UCSD) study this question empirically and come to some surprising conclusions.

First, within manufacturing, it does seem that competition with Chinese producers pushed down unionization rates, but not by very much. They show evidence that unionized producers competed in higher quality market segments than non-union firms, and so their competition with Chinese producers was much less direct.

Second, outside of manufacturing, they find that the decline in traditionally-male manufacturing employment led the spouses of these workers to seek higher employment. This accelerated women's departure from low-wage retail jobs and led many of them to pursue work in education and health care. Since these sectors tend to have relatively high unionization, shifting the workforce towards them actually raised overall unionization, relative to what it would have been without the post-1990 growth of Chinese imports.

These results have implications for understanding the broader social and non-economic consequences of the decline in manufacturing, the sources of improvements in women's labor market outcomes over the last 30 years, and how policymakers might respond to declining US unionization.

Click here to read the article on the AEA web