Research suggests that collective bargaining laws harm students, with black and Hispanic men particularly affected

Following the decision in the recent Janus v. AFSCME case, teacher’s unions warned that it would be bad for students. The causation is a little murky, but they argued that removing the power of unions to take money from non-members will weaken those unions and, somehow, harm students.

New research shows that this may not be the case. In a new paper from the National Bureau of Economic Research titled ‘The Long-run Effects of Teacher Collective Bargaining‘, economists Michael Lovenheim and Alexander Willén investigate “how teacher collective bargaining impacts student outcomes”. They focus on “duty-to-bargain (DTB) laws,
which require districts to negotiate with teachers’ unions in good faith”.

Prior work has shown extensive evidence that these laws increase union membership and the probability that a district elects a union to bargain collectively (Frandsen 2016; Lovenheim 2009; Hoxby 1996; Saltzman 1985). We use the timing of the passage of DTB laws, which occurred between 1960 and 1987 (see Figure 1), linked with educational and labor market outcomes among 35-49 year olds in the 2005-2012 American Community Survey (ACS), to provide new evidence on how teacher collective bargaining impacts a broad array of long-run outcomes.

Lovenheim and Willén find that

Among men, our estimates point to negative effects of exposure to teacher collective bargaining laws on the long-run labor market outcomes of students who grew up in states with these laws. These results are consistent with the “rent-seeking” hypothesis of teacher unionization (Hoxby 1996).

This hypothesis Lovenheim and Willén describe as stating that “unions lead to a re-allocation of resources towards teachers while also making educational resources less productive”. They go on,

At 10 years of DTB exposure, male annual earnings decline by $2,134.04 (or 3.93%) and weekly hours worked are reduced by 0.42 (or 1.09%). These individuals are also 1 percentage point less likely to be employed, are 0.8 of a percentage point less likely to be in the labor force, and sort into lower-skilled occupations.

…

We further demonstrate that the negative effects of duty-to-bargain laws are particularly pronounced among black and Hispanic males: annual earnings decline by $3,246 (9.43%), hours worked per week decline by 0.72 (2.18%), the likelihood of being employed is 1.3 percentage points lower, and years of schooling and occupational skill are significantly lower at 10 years of exposure. Collective bargaining laws also lead to worse labor market outcomes among white and Asian men, but the effects are more modest in magnitude.

Lovenheim and Willén conclude by saying that

A back-of-the-envelope calculation indicates these laws reduce total labor market earnings by $213.8 billion per year, which suggests our findings have large implications for earnings in the US due to the prevalence of duty-to-bargain laws. Our results also point to collective bargaining laws reducing hours worked as well as lowering employment and labor force participation rates. The negative effects of exposure to duty-to-bargain laws are largest among black and Hispanic men, although white and Asian men also are adversely impacted. In particular, yearly earnings decline by 9.43% among black and Hispanic males. We find more evidence of a decline in educational attainment for this group of men as well. Among white and Asian men, earnings decline by 2.80%. We complement these results with an analysis from the NLSY79 that shows duty-to-bargain laws reduce non-cognitive outcomes among young men. In total, our estimates indicate that state duty-to-bargain laws have sizable, negative labor market consequences for men who attended grade school in states with these laws. 

The recent decision in the Janus case was cause for celebration for the country’s teachers. This new research shows that their students, particularly black and Hispanic boys, will also be better off.

John Phelan is an economist at the Center of the American Experiment.