ABSTRACT
The main channel through which unions adversely impact profitability is by increasing the costs of unionized labor. The monopoly face of unions predicts that profits will fall because unions extract rents principally in the form of higher wages and other benefits. Doucouliagos and Laroche's meta-analysis of the effects of unionization on financial performance of firms included 45 comparable published studies. Meta-regression analysis identifies some of the sources of differences in union-profit estimates. MRA regresses estimates of the union-profit effect on a set of potential explanatory variables, including a correction for publication bias, using unrestricted weighted least squares. Two conclusions can be drawn from the meta-regression analysis of studies of the effect of unions on profitability. First, unions have a negative impact on financial performance. Second, much of the heterogeneity in the estimated union-profit effects in published papers reflects differences in data, measures used, specification of the econometric model, and sampling error.
