Collective Bargaining Laws and Threat Effects of Unionism in the Determination of Police Compenstation

Richard B. Freeman, Casey Ichniowski, Harrison Lauer

NBER Working Paper No. 1578 (Also Reprint No. r1190)
Issued in March 1985
NBER Program(s):Labor Studies

This study examines the effect of public sector unions on compensation packages. The model of the compensation determination process incorporates distinctive institutional aspects of public sector labor relations, particularly the differences in collective bargaining laws across states. The model is estimated using data on over 800 municipal police departments. Our results indicate that the effect of public sector unions depend critically on these institutional features of the public sector. First, unionism thrives only in those states with protective legislation. Second, in states where unionism has flourished,unionism exerts a strong upward pressure on both union and nonunion compensation packages. Cross section estimates for 1978 indicate that salaries of union and nonunion departments in highly unionized states are some 30% higher than are the salaries in states with low levels of unionism. However, no significant difference between union and nonunion salaries within states is observed. Before-after estimates of the "state-wide union effect" are more modest (9.9% to 18.1%). Finally, this "state-wide union effect" on union and nonunion departments appears to 'be even more pronounced on fringe benefits than it is on salaries. The net result is that in highly unionized states, a greater proportion of the larger compensation packages is paid in fringe benefits.

download in pdf format
   (501 K)

download in djvu format
   (310 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1578

Published: "Collective Bargaining Laws, Threat Effects, and the Determination of Police Compensation" From Journal of Labor Economics, Vol. 7, No. 2,pp. 191-209, (April 1989).

Users who downloaded this paper also downloaded* these:
Ichniowski w0769 Collective Bargaining and Compulsory Arbitration: Prescriptions for the Blue Flu
Freeman and Valletta w2284 The Effect of Public Sector Labor laws on Collective Bargaining, Wages, and Employment
Brown, Gilroy, and Kohen w0846 The Effect of the Minimum Wage on Employment and Unemployment: A Survey
Abowd, Kramarz, Lemieux, and Margolis w6111 Minimum Wages and Youth Employment in France and the United States
Freeman and Medoff w0735 The Impact of Collective Bargaining: Illusion or Reality?
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us