Monopoly Bargaining No Bargain for Students!

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Teacher union officials are always claiming their actions are “for the kids”. Now here is something that is truly “for the kids”. Andrew Lovenheim and Alexander Willen, both of Cornell University, dispel the myth that collective bargaining is good for students.

This paper presents the first analysis of the effect of teacher collective bargaining on long-run labor market and educational attainment outcomes. Our analysis exploits the different timing across states in the passage of duty-to-bargain laws in a difference-in-difference framework to identify how exposure to teacher collective bargaining affects the long-run outcomes of students.

Our estimates suggest that teacher collective bargaining worsens the future labor market outcomes of students: living in a state that has a duty-to-bargain law for all 12 grade-school years reduces earnings by $800 (or 2%) per year and decreases hours worked by 0.50 hours per week. The earnings estimate indicates that teacher collective bargaining reduces earnings by $199.6 billion in the US annually. We also find evidence of lower employment rates, which is driven by lower labor force participation, as well as reductions in the skill levels of the occupations into which workers sort. The effects are driven by men and nonwhites, who experience larger relative declines in long-run outcomes.

Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining leads to sizable reductions in measured cognitive and non-cognitive skills among young adults. Taken together, our results suggest laws that support collective bargaining for teachers have adverse long-term labor market consequences for students.

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