The effects of unionism on the wage and employment levels of police and firefighters

by Richard A. Victor

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Wage and employment equations are estimated by simultaneous equations methods for both uniformed police and firefighters. Unlike most prior work, these estimates are based upon geographically and occupationally disaggregated data. The results indicate that police unions negotiate a wage bargain which sets the pattern for other municipal employee groups. Given the police bargain, own union wage effects for other municipal employee groups appear relatively insignificant--both in magnitude and statistically. This result contradicts the significant estimates of the own union wage effect for nonpolice municipal employees found by other investigators who ignored the pattern-setting effect of the police bargain in specifying their estimating equation. They also find a significant and sizable own union employment effect for firefighters, but no significant effect on police employment. In light of the differences in the estimated wage elasticity of demand for police (-0.17) and firefighters (-1.08), greater union interest and effort in preserving employment opportunities on the part of firefighter unions is not surprising.

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