NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Fixed Effect Logit Model of the Impact Of Unionism on Quits

Richard B. Freeman

NBER Working Paper No. 280
Issued in September 1978
NBER Program(s):   LS

There are two possible reasons for unionized workers to have lower quit rates than otherwise comparable nonunion workers: unions could organize employees with innately lower propensities to quit or they could reduce propensities by offering disgruntled workers alternatives to quitting in the form of grievance arbitration and related industrial jurisprudence systems. This paper uses a fixed effect logit model based on the conditional likelihood function to disentangle these two effects. The paper finds that the observed union-quit tradeoff is due largely to the impact of unionism on worker behavior rather than to the propensity of stable workers to be organized, supporting the notion that unions have important nonwage effects along the lines suggested by the "exit-voice" model of union activity.

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