Unionization Patterns and Firm Reallocation

Abstract The model's transition dynamics are then used to analyze possible causes of the union decline. For instance, a one-time change in the legal environment (as occurred in many Southern states shortly after WW II) implies gradual adjustments in the unionization rate due to cumulative changes in organizing resources. Moreover, the induced effect on firm entry helps to explain the observed co-evolution of unions and firm reallocation (as it happened with the secular shift of manufacturing to the South).