Compensation gains of faculty unions and the unemployment effect of extending unemployment insurance coverage.

In the first study a fixed effects model is used to analyze the impact of faculty unions on compensation and salary in higher education. The fixed effects model controls for institutional factors such as size, type, location and previous compensation level, and also for unobservable factors such as quality or reputation that affect compensation and may be correlated with unionism. Cross-sectional estimates of the union effect in previous studies of faculty unions are likely to be biased because of the omission of some of these factors. The results show that the union effect, while generally small, varies greatly depending upon the type of institution and affiliation of the union. On average, faculty compensation was estimated to be only 1 to 2 percent higher after unionization at four-year institutions of higher education. The distributed lag model estimates the long run effect of faculty unions to be an increase in compensation of only 0 to 3 percent. The results suggest that faculty unions tend to narrow the faculty pay scale with instructors receiving larger percentage increases in compensation from unionization than other faculty ranks. Compensation gains of unions were found to be larger at less selective liberal arts colleges than at other institutions. The second study analyzes the effect of an extension of coverage of the unemployment insurance (UI) program on the unemployment rate. A fixed effects model is used to estimate the effect of extension of UI coverage to state or local government employees on the state unemployment rate. The state fixed effects represent factors such as the sectoral composition of the state's economy, characteristics of its labor force, and characteristics of state programs that may contribute to differences in unemployment rates across states. The state "fixed" effects are allowed to shift gradually over time in order to reflect underlying changes in these factors. The results suggest that the UI coverage extension to state and local government employees added about 0.2 to 0.3 points to the state unemployment rate. However, the conclusions must be tempered because the estimated coefficients are not estimated precisely.PhDLabor economicsHigher educationUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/162033/1/8907019.pd