Did Globalization Reduce Unionisation? Evidence from U.S. Manufacturing

How do globalization economic conditions affect labour market institutions such as unionism? We draw on recent theoretical and empirical work to yield a more comprehensive set of hypotheses related to the decline in unionisation. Furthermore, we extend recent theoretical work to highlight a direct role for competition (domestic and international) in determining unionisation. This paper uses a unique data set of U.S. three-digit manufacturing industries from 1972 to 1994 to test the hypothesis that domestic and international competition reduce unionisation. The main finding is that in spite of the importance of quasi-rents to explain unionisation, foreign and domestic competition are also significant determinants of unionisation.