All are cordially invited to the Econ-Talk "Deunionization and Immigrant Entry" by Ronit Mukherji (Vancouver School of Economics, UBC, Canada) on Wednesday, Nov 03, at 10.00AM .

Title: Deunionization and Immigrant Entry. 

Abstract:

From the late 1960s, the U.S. economy has seen a rapid decline in labour union membership and coverage. This paper argues that the entry of immigrants into the U.S. economy has significantly altered the incentives of native-born workers to join labour unions and firms to hire unionized workers, prompting a fall in unionization. Once immigrants enter the workforce, high-skilled workers choose not to join the union as their efforts are better rewarded in the non-union sector. On the other hand, low-skilled native workers who face competition from immigrant workers are now less valued by firms if unionized and cannot demand a union wage. I present evidence that the entry of low skilled immigrants drives down union rates across geographical regions using an instrumental variable approach. I find that the relationship is robust and holds even after controlling for other potential causes proposed to explain a decline of union density. A search-theoretic framework, developed to bear out the mechanism, is followed by empirically testing predictions derived from the model. The model is further calibrated to fit the data in 1980 and used to predict union density in 2000. This exercise finds that low skilled immigrant entry can explain 48-55% of the total fall in union density.

Date: Nov 03, 2021 (Wednesday); Time: 10:00-11:30AM

Paper Link: https://www.dropbox.com/s/k3hmtp7h2ru1505/Main%20paper.pdf?dl=0

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