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What impact do collective bargaining laws for teachers have on their students? This important question now has an answer.
At the annual meeting of the American Economic Association, economists Michael Lovenheim and Alexander Willen, both of Cornell University, published a paper titled The Long-run Effects of Teacher Collective Bargaining (an early version can be found here). It “presents the first analysis of the effect of teacher collective bargaining on long-run labor market and educational attainment outcomes”.
Summarizing their findings, Lovenheim and Willen write that
Our estimates suggest that teacher collective bargaining worsens the future labor market outcomes of students: living in a state that has a duty-to-bargain law for all 12 grade-school years reduces earnings by $800 (or 2%) per year and decreases hours worked by 0.50 hours per week. The earnings estimate indicates that teacher collective bargaining reduces earnings by $199.6 billion in the US annually. We also find evidence of lower employment rates, which is driven by lower labor force participation, as well as reductions in the skill levels of the occupations into which workers sort. The effects are driven by men and nonwhites, who experience larger relative declines in long-run outcomes. Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining leads to sizable reductions in measured cognitive and non-cognitive skills among young adults. Taken together, our results suggest laws that support collective bargaining for teachers have adverse long-term labor market consequences for students.
In their working paper, they write
Among nonwhites, effects are even larger: earnings decline by $1,986, hours worked decline by 1.2, employment shares decrease by 2.2 percentage points, and years of education decline by 0.17 years. Estimates for wages and occupational skill also are also large and negative, but they are imprecise.
Lovenheim and Willen believe that these negative impacts on students resulting from collective bargaining laws are “consistent with the “rent-seeking” hypothesis of teacher unionization”. This “states that unions lead to a re-allocation of resources towards teachers while also making educational resources less productive”.
This should not surprise us. Unions exist to protect their members. True, they often couch their arguments in terms of some benefit to the wider public, but the solutions they propose almost always involve some improvement of the material conditions of their members. Lovenheim and Willen’s research suggests that it is their students who pay the price.
John Phelan is an economist at Center of the American Experiment.