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Union algebra: Unionization, productivity and labor intensity restrictions

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Abstract

Two models are developed to investigate unionism effects. The first assumes Cobb-Douglas technology, derives an explicit cost function allowing for noncost minimization and separates productivity and labor intensity effects. The second assumes a more flexible translog shadow cost function and isolates a neutral productivity effect and factor-specific composite effects. The models are estimated using Allen's construction data. Both models indicate a positive union productivity effect in office construction and a negative union productivity effect in school construction. The Cobb-Douglas model indicates a binding labor-to-materials restriction in both office and school construction, but this evidence disappears with the nonminimum cost function.

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Authors and Affiliations

  1. Economics Research Service, Resources and Technology Division, U.S. Department of Agriculture, Room 508, 1301 New York Avenue, NW, 20005, Washington, DC

    Kelly Eakin

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  1. Kelly Eakin
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Eakin, K. Union algebra: Unionization, productivity and labor intensity restrictions. J Prod Anal 5, 81–98 (1994). https://doi.org/10.1007/BF01073599

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