Does Unionization Increase Faculty Retention?

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<ul><li><p>Does Unionization Increase Faculty Retention? </p><p>DANIEL I. REES </p><p>Although there has been a large amount of research on the union- nonunion salary differential in higher education, little empirical work has been done on the possible nonsalary effects of faculty unions. This paper, using data from the AAUP and other sources, investigates unionizations impact on faculty retention rates. It is found that, holding salary, benefits, and other factors constant, unions increase a schools faculty retention rate for associate and full professors (although not for assistant profes- sors). The impact of unionization, however, is not felt until a number of years after a representation election. </p><p>A LARGE NUMBER OF studies have attempted to estimate the union-nonunion salary differential for university and college professors. Very little empirical work, however, has been done on the nonsalary ef- fects of faculty unions. This paper will investigate unionizations impact on the retention of professors. The analysis will be at the level of the college or university, and will depend heavily, but not exclusively, on data from the AAUP (American Association of University Professors). </p><p>Studies using nationally representative samples of workers have shown that union workers are less likely to quit their jobs than are nonunion workers, even when wages and other factors are held c0nstant.l This is an important result in that it suggests that it is possible for unionization to have a net positive effect on productivity. The research in this area by </p><p>* Department of Economics, University of Colorado at Denver. The author wishes to thank Ronald Ehrenberg, Albert Rees, and the labor economics workshop participants at Cornell University for comments on earlier versions. Correspondence should be sent to the author at University of Colorado at Denver, Economics Department, Campus Box 181, P.O. Box 173364, Denver, CO 80217-3364. Access to the data used in this paper is limited because some schools data submissions to the AAUP are confidential. </p><p>See, for example, Freeman (1980) or Freeman and Medoff (1984). </p><p>INDUSTRIAL RELATIONS, Vol. 33, No. 3 (July 1994). 0 1994 Regents of the University of California Published by Blackwell Publishers, 238 Main Street, Cambridge, MA 02142, USA, and 108 Cowley </p><p>Road, Oxford, OX4 IJF, UK. </p><p>297 </p></li><li><p>298 / DANIEL I. REES </p><p>TABLE 1 NUMBER AND PERCENT OF FACULTY REPRESENTED BY A BARGAINING </p><p>AGENT ACCORDING TO INSTITUTION TYPE: 1987-88 </p><p>Institution Type </p><p>Two-year Four-year </p><p>Total Number of Faculty Number of Faculty Represented by a Bargaining </p><p>Agent in the Public Sector Number of Faculty Represented by a Bargaining </p><p>Agent in the Private Sector Percent of Faculty Represented by a Bargaining </p><p>Agent in Public and Private Sectors Combined </p><p>21 4,000 80,106 </p><p>82 1 </p><p>38 </p><p>509,000 123,638 </p><p>9.108 </p><p>26 </p><p>SOURCES: Douglas (1988); American Council on Education (1990). a Figures are for full- and part-time faculty, including instructors and lecturers. Some schools include librarians and </p><p>other professional support staff when reporting the number of faculty represented by a bargaining agent. </p><p>Freeman and Medoff (1984) is perhaps the best known. These authors argued that the effect of unions on quits comes about through unions acting as conductors of worker voice, a term they borrowed from Hirschman (1970). If unionization is found to increase a schools faculty retention rate (holding salary and benefits constant), this would suggest that faculty unions can provide their members with a voice alternative to quitting much in the same way that more traditional unions provide a voice alternative to their members. </p><p>Two basic models will be used in the paper: a cross-section model, which will be estimated for the academic year 1987-88; and a fixed-effects model, which will be estimated using data from the years 1970-71 through 1987-88. In addition to measuring the average effect of faculty unions on retention rates, I will explore how this effect varies with the length of time an institution has been organized. Also, issues such as whether the effect depends upon institution type or faculty rank will be explored. </p><p>Background In the 1987-88 academic year, approximately 26 percent of faculty at four- </p><p>year colleges and universities were represented by a union (Table 1). At two- year institutions, the corresponding figure was even higher-38 percent .2 </p><p>These union densities should be viewed as rough approximations. The total numbers of faculty in two- and four-year schools are reported to the nearest thousandth. Also, some schools include librari- ans and other professional support staff when reporting the number of faculty represented by a bargaining agent. (See Table 1 for sources.) </p></li><li><p>Does Unionization Increase Faculty Retention? I 299 </p><p>Clearly, organizations such as the AAUP, NEA, and AFT have had some success in organizing professor^.^ </p><p>However, it could be argued that unionization has not had a large impact on the employment conditions of faculty members. A number of studies have concluded that the union-nonunion salary differential in higher educa- tion is small or even n e g a t i ~ e . ~ Why, then, do such a large proportion of professors continue to support unionization? What is it that the unions are doing if not raising their members salaries? </p><p>In the 1960s the higher education sector grew tremendo~sly.~ With this growth came an increase in bureaucratization, and, according to authors such as Garbarino and Johnstone, a feeling on the part of professors that they were being forced out of the decision-making process. These authors suggested that unionization was, at least in part, an attempt by faculty members to regain some control over their work environment (Garbarino, 1975, pp. 10-11; Johnstone, 1981, p. 8). </p><p>This is, of course, a difficult hypothesis to test formally. It fits in nicely, however, with Freeman (1976) and with Freeman and Medoffs (1984) exit-voice model of unionism. According to Freeman and Medoff, unions can enhance communication between workers and management, and pro- vide workers with protection from arbitrary or unfair management deci- sions. As a result, unions can reduce quits. It is important to note that this voice effect on quits comes with little or no economic cost to manage- ment or society, and is separate from the effect that one would expect due to higher wages and benefits. </p><p>In his 1980 article, Freeman showed that the typical union worker in the United States was less likely to leave a job than was the typical nonunion worker. He attributed this result to a voice effect, since wages and other factors were controlled for in the analysis. The question this paper will attempt to address is whether Freemans result can be duplicated when university and college professors are examined separately. Or, in other words, it will ask, Do faculty unions have a voice effect on quits?6 </p><p>The bulk of organized schools in the United States are affiliated with at least one of these three organizations. For instance, of the 476 contracts listed in Douglas (1989), 418 cited either the AAUP, the AFT, or the NEA as a bargaining agent. </p><p>See Bacharach, Schmidle and Bauer (1987) for a review of the literature on the union-nonunion salary differential. Also see Barbezat (1989), Kesselring (1991), and Rees (1993). </p><p>In 1960,3.8 million students were enrolled in institutions of higher learning. By 1970 this figure had jumped to 8.6 million (American Council on Education, 1990, p. 68). </p><p>6The presence of a union voice effect on quits does not necessarily translate into increased productiv- ity. If new hires are typically made at the assistant professor level, then the answer in part depends on the relationship between faculty productivity and general experience or age. (Rees and Smith [1991, pp. 53-78] review the literature in this area and argue that age effects on teaching quality are quite </p></li><li><p>300 / DANIEL I. REES </p><p>One reason to expect there to be a voice effect is that most faculty union contracts include a grievance procedure provision. In a sample of 89 con- tracts from four-year schools Johnstone (1981, p. 25) found that only 2 did not contain a section outlining a grievance p r ~ c e d u r e . ~ Grievance proce- dures, according to Freeman and Medoff, are an important factor distin- guishing the union from the nonunion sector.* They allow workers to appeal management decisions with which they disagree, and give workers a sense that they were treated justly even if a management decision is upheld. Of course, not all grievance procedures are alike, and these differ- ences will result in different effects on quits (Rees, 1991). However, at least in four-year schools, most academic grievance procedures seem to be fairly strong. For instance, 84 percent of the grievance procedures in John- stones survey ended in binding arbitration (Johnstone, 1981, p. 29). </p><p>Despite the presence of grievance procedures in faculty collective bar- gaining contracts, it is possible that university and college professors pres- ent special problems for the exit-voice model of unionism. Professionals, even when not represented by a union, generally enjoy a fair amount of influence over their immediate workplace environment. Also, formal mechanisms for representation such as faculty senates give professors at some schools an especially important role in determining how their institu- tion is run. This suggests that there may be little room for faculty unions to enhance employee voice. </p><p>However, it may be that those faculty who choose to organize are pre- cisely those who want to increase their influence, perhaps because they felt shut out in the past. The fact that two-year schools make up the bulk of organized institutions seems to support this view.g These are among the institutions that have traditionally restricted faculty input in decision mak- ing the most (Keller, 1983, p. 37). </p><p>It is interesting to note that the exit-voice model of unionism is silent with regard to the timing of unionizations effect on quits. Do quits immedi- </p><p>small. Research output, however, clearly declines with age.) Other factors that need to be considered are hiring costs and the existence of institution-specific human capital. </p><p>One of these two schools had a hearing procedure that seemed to function as a grievance procedure (Johnstone, 1981, p. 25) . </p><p>Freeman and Medoff (1984, pp. 107-109) noted the presence of grievance procedures outside the union sector, but argued that these procedures do not work well. Schools without collective bargaining agreements frequently have some type of grievance procedure in place. Typically, however, these procedures end with a nonbinding recommendation to the administration, and provisions for arbitra- tion seem to be extremely rare (Estey, 1986, p. 13). Begin (1978) gives a detailed account of the grievance process at Rutgers University before and after unionization. </p><p>In the 1988-89 academic year, a total of 1027 schools were organized. Of these schools, 606 were two-year institutions (Douglas, 1989, p. 110). </p></li><li><p>Does Unionization Increase Faculty Retention? I 301 </p><p>ately decrease when an establishments employees elect a union to repre- sent them, or does it take time for the union to become an effective conduit for worker voice? At what point in time after the election is the union most effective at representing its members concerns? Might there even be an immediate increase in turnover after an election due to employ- ees who were unhappy with the outcome of the vote leaving? The essay will explore these questions in addition to estimating the average impact faculty unions have on quits. </p><p>Distinguishing between Quits and Other Exits In order to test Freeman and Medoffs exit-voice model of unionism, </p><p>ideally one would like to have individual-level data that allow the re- searcher to precisely identify employee quits. Unfortunately, no such data are available for professors from a set of schools that include unionized institutions. Instead, what is used are school-level data for full-time profes- sors in which a schools faculty retention rate will serve as a measure of the level of quits. </p><p>An institutionss faculty retention rate for a particular rank in year t will be defined as follows: the number of full-time faculty in the rank who were employed by the institution in year t and remained employed at that same institution in year t + 1, divided by the total number of full-time faculty in the rank employed at the institution in year t. Faculty who did not change institutions but who advanced in rank from one year to the next are counted as continuing and so are part of the numerator. Also, faculty on leave with pay are included in both the numerator and denominator. </p><p>Obviously, when quits increase the retention rate will fall, holding all else equal. But other types of exit behavior, such as terminations, retire- ments, and deaths, will also influence the faculty retention rate of a school. If unionization is found to affect faculty retention rates, can one be certain that it is through quits and not one of these other factors? </p><p>One way to address this question is to focus the analysis on associate professors. The advantage of this approach is that a large proportion of associate professors have tenure, and so their retention rate in a given school can be thought of as a reflection of voluntary decisions to leave.I0 (A voluntary decision to leave is presumably based on a comparison of </p><p>lo According to data from the AAUPs Annual Survey of Compensation, 80 percent of associate professors were tenured in the 1987-88 academic year. The corresponding figures for full and assistant professors were 94 and 21 percent, respectively. </p><p>See Rosovsky (1990, p. 178) for a brief discussion of the circumstances under which a tenured faculty member can be dismissed. </p></li><li><p>302 / DANIEL I . REES </p><p>utility in the current job with expected utility from the best alternative option.) Of course, full professors also generally have tenured status, but their retention rate will vary more strongly according to factors that affect the retirement decision. </p><p>It may be interesting to briefly examine the effect of unionization on the retention rates of ranks other than that of associate professor. There is at least anecdotal evidence that unionization tends to make it easier for assistant professors to attain tenure. Most union contracts allow faculty to grieve tenure decisions, and stories of overturned denials of tenure are common (see Lindenberg, 1986, p. 23, for an example of such a story). According to this argument, one would expect unionization to have a positive effect on the retention rate of assistant professors. </p><p>One might also expect full professors to have higher retention rates in organized institutions; unions, acting in their voice capacity, could discour- age quits and early retirements. However, it may be that unions actually encourage early retirements through...</p></li></ul>