Unit 4 American Dream Text A: Tony Trivisonno’s American Dream.
Bargaining for the American Dream
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Bargaining for the American Dream
What Unions do for Mobility
By Richard Freeman, Eunice Han, David Madland, and Brendan V. Duke September 2015
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Bargaining for theAmerican DreamWhat Unions do for Mobility
By Richard Freeman, Eunice Han, David Madland, and Brendan V. Duke
September 2015
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1 Introduction and summary
4 Unions and intergenerational mobility by area
10 Mobility in union and nonunion households
14 Unions and stagnant intergenerational mobility
16 Conclusion
17 Appendix A: Area-level data
20 Appendix B: Area-level analysis
24 Appendix C: Individual household data and analysis
31 Endnotes
Contents
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1 Center for American Progress | Bargaining for the American Dream
Introduction and summary
One o he cenral challenges acing he Unied Saes on which boh progressives
and conservaives can agree is he need o increase economic mobiliy. Upward
mobiliy and opporuniy are he definiion o he American dream. Bu oday,
he naion has less mobiliy and ewer opporuniies when compared o oher
advanced economies. A U.S. child born in he botom 20 percen o he income
disribuion, or example, has a 7.5 percen probabiliy o reaching he op 20
percen as an adul, compared o 11.7 percen in Denmark and 13.4 percen in
Canada.1 Increasing mobiliy, however, requires undersanding why i is low.
Research by economiss Raj Chety o Sanord Universiy, Nahaniel Hendren
o Harvard Universiy and Parick Kline and Emmanuel Saez o he Universiy o
Caliornia, Berkeley, shows ha some regions o he Unied Saes have levels o
mobiliyha is o say, he abiliy o improve upon he siuaion o one’s birh
similar o Denmark and Canada. However, ha same research reveals ha oher
U.S. areas have mobiliy levels ha are lower han any oher advanced economy
or which daa are available. Te research o Chety and his ellow auhors also
show ha five acors have he sronges geographical relaionshipposiive or
negaivewih mobiliy: single moherhood raes, income inequaliy, high school
dropou raes, social capial, and segregaion.2
Tis repor examines he relaionship beween mobiliy and anoher variable ha
Chety and his co-auhors did no consider: union membership. Te analysis in
his repor begins on he area level using he same mehodological approach as
Chety and his co-auhors or heir five acors. Bu he analysis hen goes beyond
his area-level analysis, using anoher daase ha maches parens wih children
ha allows or he comparison o oucomes or children who grew up in oherwise
similar union and nonunion households. Tis individual-level analysis is moreappropriae han he area-level analysis or examining wheher parens’ union
membership acually influences mobiliy.
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2 Center for American Progress | Bargaining for the American Dream
*All reference to “we,” “us,” and “our” refer to the authors of this report.
Based on he research or his repor, i is clear ha here is a srong relaionship
beween union membership and inergeneraional mobiliy. More specifically:
• Areas with higher union membership demonstrate more mobility for low-
income children. Using Chety and ohers’ daa, we* find ha low-income
children rise higher in he income rankings when hey grow up in areas wihhigh-union membership. A 10 percenage poin increase in a geographic area’s
union membership is associaed wih low-income children ranking 1.3 per-
cenile poins higher in he naional income disribuion. Tis relaionship
beween unions and he mobiliy o low-income children is a leas as srong
as he relaionship beween mobiliy and high school dropou raesa acor
ha is generally recognized as one o he mos imporan correlaes o eco-
nomic mobiliy. Indeed, union densiy is one o he sronges predicors o an
area’s mobiliy. Furhermore, unions remain a significan predicor o economic
mobiliy even afer one conrols or several variables including race, ypes o
indusries, inequaliy, and more.
• Areas with higher union membership have more mobility as measured by
all children’s incomes. We also measure he geographic relaionship beween
union membership and anoher measure o mobiliy: he income o all children
who grew up in an area afer conrolling or heir parens’ incomes. According
o our findings, a 10 percenage poin increase in union densiy is associaed
wih a 4.5 percen increase in he income o an area’s children. Here again, union
densiy compares quie avorable wih oher common predicors o an area’s
mobiliy. In addiion, he relaionship beween unions and he mobiliy o all
children remains srong afer adoping several addiional conrols.
• Children who grow up in union households have better outcomes. Using a differ-
en daase, we mach parens and children o compare he oucomes o children
who grew up in oherwise similar union and nonunion households. Te findings
show ha children growing up in union households end o have beter oucomes
han children who grew up in nonunion households, especially when he parens
are low skilled. For example, children o non-college-educaed ahers earn 28
percen more i heir aher was in a labor union. Tis analysis helps provide evi-
dence suggesing a link beween unions and economic mobiliy.
Tese findings are new and illusrae a previously ignored acor ha could be
essenial or promoing economic mobiliy. However, hey are no surprising, par-
icularly given he exensive research ha has been done on unions and middle-
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3 Center for American Progress | Bargaining for the American Dream
class incomes. Previous research by he CAP Acion Fund has ound a srong
geographical relaionship beween union membership and inrageneraional
mobiliyhe relaionship beween someone’s earnings when hey are 35 o 39
years old and when hey are 45 o 49 years old.3 Our findings also coincide wih
he findings o several sudies showing ha alling union membership has been a
key driver in he rise o income inequaliy.4
Mos recenly, Bruce Wesern and JakeRoseneld o Harvard and he Washingon Universiy a S. Louis, respecively,
ound ha he decline o labor unions explains up o one-hird o he increase in
male wage inequaliy beween 1973 and 2007.5
Tere are srong reasons o believe ha unions may increase opporuniy. Firs,
here are he direc effecs ha a paren’s union membership may have on heir
children. Union workers make more money han comparable nonunion work-
erswha economiss call he union premiumand when parens make more
money, heir children end o make more moneywhich economiss reer o as
he inergeneraional earnings elasiciy. In heory, unionized parens should passon a porion o he union premium o heir children. Tere may be oher chan-
nels hrough which children whose parens were in a union have beter oucomes
han oher children: union jobs may be more sable and predicable, which could
produce a more sable living environmen or children, and union jobs are more
likely o provide amily healh insurance.
Bu here are also a series o oher ways ha unions could boos inergeneraional
mobiliy or nonunion workers. I has been shown ha unions push up wages or
nonunion workers, or example, and hese wage gains or nonunion members
could be passed on o heir children.6 Children who grow up in nonunion house-
holds may also display more mobiliy in highly unionized areas, or example,
because hey may be able o join a union when hey ener he labor marke. Finally,
unions generally advocae or policies ha benefi all working peoplesuch as
minimum wage increases and increased expendiures on schools and public ser-
vicesha may especially benefi low-income parens and heir children. A recen
sudy on ineres groups and poliical influence ound ha mos o he naional
groups ha suppored middle-class prioriies were unions.7 Anoher sudy ound
ha saes wih higher union densiy also have higher minimum wages.8
In shor, here are many heoreical reasons o expec unions o go hand in hand
wih economic mobiliy, and his paper provides empirical evidence ha his is
indeed he case.
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Unions and intergenerational
mobility by area
In 2013, Chety, Hendren, Kline, and Saez made headlines wih heir paper
“Where is he Land o Opporuniy? Te Geography o Inergeneraional
Mobiliy in he Unied Saes.” Using ederal ax records, hey were able o
esimae he relaionship beween paren and child incomesinergeneraional
mobiliywih more precision han previous daases. Measuring he variaion in
mobiliy in areaswha hey call commuing zones, or CZsacross he counry,
hey ound ha some areas such as Pitsburgh, Pennsylvania, and Minneapolis,
Minnesoa, had much higher mobiliy han oher areas such as Charlote, NorhCarolina, and Alana, Georgia.
Te main limiaion o using ax records, however, is he lack o deailed individual
demographic and socioeconomic daa ha would allow scholars o examine par-
ens’ and children’s characerisics ha have he closes associaions wih inergen-
eraional mobiliy. Insead, Chety and his co-auhors combined he geographical
mobiliy esimaes wih rich demographic and social saisics on commuing
zones rom public daa sources o examine he geographical correlaion. Tey
ound ha five acors had he sronges relaionship wih mobiliy across com-
muing zones: he percen o children wih single mohers, social capial, income
inequaliy, high school dropou raes, and a measure o residenial segregaion
he percenage o workers wih less han 15 minue commues o heir jobs.
Chety and his co-auhors righly emphasize ha he geographical correlaions
hey find are no necessarily causal, bu raher serve as “a se o sylized acs o
guide he search or causal deerminans and he developmen o new models o
inergeneraional mobiliy.”9 Wha our geographical analysis does esablish is he
sylized ac ha regions wih higher union membership exhibi higher inergener-
aional mobiliy. Our analysis in he nex secion invesigaes his relaionship moreclosely, using survey daa o examine he relaionship beween individual parens’
union saus and heir children’s mobiliy while conrolling or more acors.
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Using wo geographic measures o mobiliy, we ollow he same approach as
Chety and his co-auhors o examine heir relaionship wih unions: We calcu-
lae he percen o workers in a commuing zone who are members o a union
reerred o as union densiyand measure is correlaion wih mobiliy across
commuing zones. o see how we consruced he union variable and he com-
muing zones, see Appendix A.
Mobility for low-income children
Te main variable Chety and his co-auhors use o measure geographical mobil-
iy is wha hey call absolue upward mobiliyhe expeced rank in he naional
income disribuion o a 29- o 32-year-old whose parens were in he 25h
percenile o he naional income disribuion. We use he same variable in heir
analysis, bu call i “mobiliy or low-income children” o avoid conusion wih our
oher mobiliy measure.
In our sample’s average commuing zone, he average 29- o 32-year old whose
parens were in he 25h percenile o he naional income disribuion ends up in
he 40.7h percenile as an adul. We find a very srong correlaion beween unions
and mobiliy across commuing zones: A 10 percenage poin increase in he
share o workers in a union is associaed wih a 1.3 percenile increase in children’s
rank. As a poin o comparison, he difference in mobiliy beween San Francisco,
Caliornia and Alana, Georgiarespecively, one o he mos and one o he
leas mobile o he 25 larges CZsis 7.1 percenile poins.
Figure 2 compares he size o he correlaion beween areas’ union membership
raes wih he five oher acors Chety and his co-auhors idenified as having he
sronges correlaion wih mobiliy.10 Te relaionship beween unionizaion and
mobiliy is abou he same as he relaionship beween residenial segregaion and
high school dropou raes, wo commonly cied drivers o mobiliy. Even when
one conrols or several variablesa commuing zone’s racial makeup, indusry
makeup, Chety’s five acors, he number o children per amily, he child pov-
ery rae, he median house value, he progressiviy o he ax code, and he share
o amilies covered by a sae’s Earned Income ax Credi, or EIChe shareo workers in a union remains a significan correlae o mobiliy or low-income
children. For deails on he analysis, see Appendix B.
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FIGURE 1
Union membership goes with economic mobility for low-income
kids across regions
Note: Dots represent union membership and mobility for low-income children by commuting zone. Labeled dots represent 15 mostpopulous commuting zones.
Source: Authors' analysis using data from Raj Chetty and others, "Where is the Land of Opportunity? The Geography of Intergenerational
Mobility in the United States," Quarterly Journal of Economics 129 (4) (2014): 1553–1623, available at http://www.equality-of-opportuni-ty.org; Data from Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current Population
Survey: Note," Industrial and Labor Relations Review 56 (2) (2003): 349–54, available at http://www.unionstats.com.
Expected income rank of low-income children by region
0 10 20 30 40
33
37
41
45
49
Union membership, 1986
Houston
Dallas
Atlanta
Miami
Boston
Washington, D.C.Los Angeles
Bridgeport
Newark San Francisco
Detroit
New York Seattle
Chicago
Philadelphia
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Mobility for all children
How unions affec he mobiliy o children who grew up in he 25h percenile is
imporan, bu perhaps even more imporan is how union membership affecs
he income rajecories o all children in a geographic area. Using Chety and his
co-auhors’ daa, we explore his quesion wih a variable ha we call mobiliy or
all childrenhe average income o aduls who grew up in an area conrolling or
he average income o heir parens.
Imporanly, his measure avoids he issue o wha he opimal-level o social
mobiliy is since higher incomes or all children in an area is unambiguously posi-
ive. For he rank-based measure used or low-income children, on he oher hand,
he opimal-level o mobiliy is unclear oher han he ac ha having i higherhan i is oday is preerable. Some associaion beween paren and children’s eco-
nomic saus may be desirable or sociey as i provides an incenive or parens o
inves in he human capial o heir children.
FIGURE 2
Union membership is strongly correlated with economic mobility
for low-income children
Absolute value of correlation between economic mobility for low-income children
and union membership compared to Chetty and others' "five factors"
Note: Correlation is estimate from regression, normalizing both dependent and independent variables so that univariate regressioncoefficients equal correlation coefficients. Unlike Chetty and his coauthors’ analysis, inequality is for the entire income distributioninstead of the bottom 99 percent resulting from issues in merging union and mobility data.
Source: Authors' analysis using data from Raj Chetty and others, "Where is the Land of Opportunity? The Geography of IntergenerationalMobility in the United States," Quarterly Journal of Economics 129 (4) (2014): 1553–1623, available at http://www.equality-of-opportuni-
ty.org; Data from Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current PopulationSurvey: Note," Industrial and Labor Relations Review 56 (2) (2003): 349–54, available at http://www.unionstats.com.
0.0
0.2
0.4
0.6
Segregation Social capital Dropout rates
Singlemotherhood
Unionmembership
0.255 0.270 0.274 0.333 0.367 0.626
Inequality
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Again, we find a srong relaionship beween mobiliy or all children and union
membershipa 10 percenage poin increase in union densiy is associaed wih a
4.5 percen increase in children’s incomesconrolling or heir parens’ incomes.
Even afer inroducing he several conrols menioned above, a 10 percenage
poin increase in an area’s union membership is sill associaed wih a 3 percen
increase in children’s laer incomes.
FIGURE 3
Union membership goes with economic mobility for all kids
across regions
Note: Dots represent union membership and mobility for all children by commuting zone. Mobility for all children is displayed using theresidual from a regression of the log of the commuting zone's average children's income on the log of the commuting zone's averageparent's income. Labeled dots represent 15 most populous commuting zones.
Source: Authors' analysis using data from Raj Chetty and others, "Where is the Land of Opportunity? The Geography of Intergenerational
Mobility in the United States," Quarterly Journal of Economics 129 (4) (2014): 1553–1623, available at http://www.equality-of-opportuni-ty.org; Data from Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current Population
Survey: Note," Industrial and Labor Relations Review 56 (2) (2003): 349–54, available at http://www.unionstats.com.
0 10 20 30 40
-0.2
-0.1
0.0
0.1
0.2
Union membership, 1986
Mobility for all children, 1980–1982 cohort
Houston
Dallas
Atlanta
Miami
Boston
Washington, D.C.
Los Angeles
Newark
San Francisco
Detroit
New York
Seattle
Chicago
Philadelphia
Bridgeport
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Discussion
Tis analysis reveals ha areas wih higher union membership have higher mobil-
iy no jus or low- income children, bu or all children. Tis relaionship holds
even afer conrolling or several oher acors, some o which may serve as a chan-
nel or how unions increase mobiliy. Our analysis, or example, conrols or ax
progressiviy, which Chety and his co-auhors find has a posiive correlaion wih
mobiliy. Unions, o course, are possibly he mos imporan advocaes in saes
or progressive ax codes and ha may be one o he key ways ha unions increase
mobiliy. By conrolling or ax progressiviy and oher variables such as social
capial ha a region’s union membership likely influences, we have subjeced he
union-mobiliy relaionship o a sringen es ha i appears o have passed.
Neverheless, Chety and his co-auhors cauion ha he correlaions hey find
such as he srongly negaive relaionship beween single moherhood raes and
mobiliyshould be inerpreed as a se o correlaions and sylized acs raherhan a causal finding. Te same cavea applies o our findings abou he spaial
relaionship beween unions and inergeneraional mobiliy. Wha is clear, how-
ever, is ha mobiliy hrives in areas where unions hrive.
Note: Correlation is estimate from regression, normalizing both dependent and independent variables so that univariate regression
coefficients equal correlation coefficients
Source: Authors' analysis using data from Raj Chetty and others, "Where is the Land of Opportunity? The Geography of IntergenerationalMobility in the United States," Quarterly Journal of Economics 129 (4) (2014): 1553–1623, available at http://www.equality-of-opportuni-
ty.org; Data from Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current PopulationSurvey: Note," Industrial and Labor Relations Review 56 (2) (2003): 349–54, available at http://www.unionstats.com.
FIGURE 4
Union membership is strongly correlated with mobility for all children
Absolute value of correlation between mobility for all children and union
membership compared to Chetty and others' "five factors"
0.00
0.10
0.20
0.30
Dropout rates
Singlemotherhood
Social capital SegregationUnion
membership
Inequality
0.219 0.247 0.260 0.270 0.271 0.310
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Mobility in union and
nonunion households
More confidence can be developed ha here is a srong relaionship beween
unions and upward mobiliy by using household-level daa o compare he
rajecories o children rom union and similar nonunion households. Ideally,
randomized conrols could be perormed or a naural experimen could be ideni-
fied where he assignmen o union membership is random and mobiliy could
be measured. Unorunaely, ha is no plausible. Insead, we use survey daa and
conrol or several observable characerisics o he parens, including race, educa-
ion, indusry, occupaion, age, work saus, and urban saus.
Te Panel Sudy o Income Dynamics, or PSID, is he bes daase or his work
because i no only racks households, bu when children rom he original house-
hold orm heir own household, i coninues o collec inormaion abou hem.
Tereore, i is possible o combine he characerisics o 26- o 37-year olds in
2011 wih he characerisics o heir parens in 1985 and compare he rajecories
o children whose parens were oherwise similar excep or heir union saus. See
Appendix C or more deails.
Similar o he geographic analysis, we examine wheher parens’ union saus
booss earnings or children overall and wheher i raises he earnings o he chil-
dren o low-skilled parens relaive o he children o high-skilled parens. Unlike
he previous analysis, which ocused on children whose parens’ incomes were
he samein he 25h percenilewe ocus on measures o skilleducaion and
blue- or whie-collar saussince one o he ways ha unions may boos relaive
mobiliy is by increasing he incomes o low-skilled aduls via he union premium,
which hese workers can hen pass on o heir children.
Neverheless, when one conrols or income, here is sill a saisically significanposiive relaionship beween union membership and children’s mobiliy, sugges-
ing channels or how parens’ union saus influences mobiliy independen o
one year o income. We also examine wheher parens’ union saus affecs oher
measures o well-being ouside o income, more specifically healh and educa-
ionwhich can also lead o higher incomes laer in lie.
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Effect of unions on children’s incomes
o provide a firs look a he effec o unions on children’s income, we do a simple
comparison o he labor incomes o ull-ime workers by he union saus o heir
parens. Tis par o he analysis does no conrol or any o he many possible
differences beween union and nonunion parens; insead, i does he comparisonseparaely or children wih a paren who graduaed college and children whose
parens did no. Tis is o ensure ha any posiive effec o unions on children’s
incomes acually increases opporuniy or hose who need i mos. Figure 5 pres-
ens he average incomes o children in he sample differeniaed by heir parens’
union saus and educaional saus.
Among children whose parens did no graduae college, he average income o
children wih a union paren exceeds he average income o children wih non-
union parens by $6,300, or 16 percen, a difference ha is significan a he 1 per-
cen level. For children who did have a paren who graduaed college, union saushad essenially no effec. Te resul or children whose parens graduaed college
indicaes ha unions could increase inergeneraional mobiliy. Bu he resuls do
no provide any insigh ino wheher hese differences reflec he direc impac o
paren’s union saus on children’s incomes.
*Difference is not statistically significant
Note: Calculations are for 26- to 37-year-olds who work full time and who had at least one parent who worked full time in 1985.
Source: Authors' analysis of the Panel Study of Income Dynamics 1985 and 2011 files, available at https://psidonline.isr.umich.edu/.
FIGURE 5
Children whose parents were in a union have higher earnings
Average labor income of children by parents’ union and education status
Parents did not graduate college At least one parent graduated college*
Union parent
Nonunion parents
$0
$20,000
$40,000
$60,000
$46,000
$39,000
$53,000 $54,000
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For his repor, we perorm a regression analysis ha conrols or several char-
acerisics o he parens ha affec heir income o allow or an apples-o-apples
comparison beween union and nonunion parens: race, ehniciy, marial saus,
educaion, age, urbanizaion, occupaion, ull-ime saus, and indusry. We find
ha he effec o having a aher in a union is an 18.7 percen increase in a child’s
earnings, an effec ha is significan a he 1 percen level. Nex, we conrol or heincome o he parens o examine i here are oher ways ha parens’ union saus
affecs mobiliy ouside o higher parenal incomes. Based on he findings, a union
aher sill increases an offspring’s income by a saisically significan 16.4 percen.
When he sample is divided ino sons and daughers, one finds ha union ahers
have posiive effecs on boh sons and daughers. Union mohers, on he oher
hand, have a posiive effec on daughers’ earnings bu have no effec on sons. We
also find ha union membership o he parens raises he incomes o children
independen o he child’s own union saus.
Te ac ha unions increase he earnings o children does no necessarily meanhey boos inergeneraional mobiliy in relaive erms; he quesion is wheher
unions boos he earnings o he children o higher-skilled or lower-skilled
parens. We do his by dividing our sample ino approximaely equally sized skill
groups based on he skill saus o he aher. Te firs comparison is or ahers
who atended college and ahers who did no. Te second comparison is or
ahers in blue-collar jobs and ahers in whie-collar jobs.
We find ha he effecs o ahers’ union saus are concenraed among he chil-
dren o lower-skilled ahers. For sons wih a aher who did no atend college,
unions boos earnings by 27.5 percen, and children o a aher wih a blue-collar
job see a 21.3 percen earnings increase. On he oher hand, unions do no have
saisically significan effecs on children wih college-educaed ahers or whie-
collar ahers. Te benefis o parens’ union saus are hus concenraed among
he children o lower-skilled parens, implying ha unions increase relaive iner-
generaional mobiliy.
We also examine wo oher measures o mobiliyhe healh and educaion o
he children. We measure educaion by years o school compleed and find ha a
aher in a union is associaed wih compleing an addiional hal year o educa-ion. We measure he effec o unions on healh using a five-poin scale or sel-
repored healh, 1 being lowes and 5 being highes. We find boh union ahers
and mohers are associaed wih saisically significan increases o 0.14 and 0.16
poins, respecively.11
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Discussion
Our findings among households ell a similar sory o he findings among com-
muing zones: union membership or parens has a posiive associaion wih
children’s uure earnings. Imporanly, hese effecs are concenraed among he
children o low-skill workers, which urns his inergeneraional union premium
ino a orce or inergeneraional mobiliy. Tese findings are especially noewor-
hy when combined wih he previous area-level analysis because he analyses
come rom wo compleely differen daases on wo differen levelshe regional
and household level.
Te household-level findings sugges a srong relaionship exiss beween unions
and mobiliy. Proving causaliy, however, is difficul wihou experimenal or quasi-
experimenal daa, which have become he gold sandard in modern empirical eco-
nomics. Bu he hope is ha hese findings will rigger urher research ino wheher
a causal relaionship beween unions and inergeneraional mobiliy exiss.
0%
10%
20%
30%
*Not statistically significant
Note: Calculations are for 26- to 37-year-olds who work full time and lived with a father in 1985 who worked full time. Calculationscontrol for father’s age, race, marital status, industry, occupation, and the urban status of the household.
Source: Authors' analysis of the Panel Study of Income Dynamics 1985 and 2011 files, available at https://psidonline.isr.umich.edu/
FIGURE 6
Unions increase the earnings of children with lower-skilled fathers
Effect of father’s union status on labor incomes of children by father’s skill group
No college education
Blue collar
White collar*
At least somecollege education*
27.5% 10.7% 21.3% 6.7%
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Unions and stagnant
intergenerational mobility
I unions boos inergeneraional mobiliy and hey have declined so much over
he pas 40 years, should economic mobiliy have allen? Chety and his co-
auhors analyze he ime rend o anoher measure o mobiliyhe probabiliy
ha a child born in he botom quinile would reach he op quinileand hey
find ha i did no decline beween he 1973 and 1993 birh cohors, a period over
which income inequaliy grew and unionizaion ell.12 A firs glance, his presens
a puzzle or our finding ha unionizaion is associaed wih inergeneraional
mobiliy, as well as or Chety and ohers’ finding wih respec o income equaliy.
Bu his puzzle only exiss i one believes ha declining union membership and
growing income inequaliy were he only rends ha affeced mobiliy over he
pas 40 years. Chety and his co-auhors find ha high school dropou raes and
racial segregaion have declined, offseting he decline in mobiliy one would
predic based on rising inequaliy and single moherhood raes:
We predict the trend in the rank-rank slope [relative mobility] implied by
changes in the five key correlates over time … Te predicted changes are quite
small because the factors move in opposing directions. For example, the increase
in inequality and single parenthood rates in recent decades predict a small
decline in mobility in recent decades. In contrast, the decline in racial segregation
and high school dropout rates predict an increase in mobility of similar mag-
nitude. Overall, the cross-sectional correlations documented here are consistent
with the lack of a substantial time trend in mobility in recent decades.13
Chety has also noed elsewhere ha mobiliy should have grown in a period
o alling racial discriminaion and he War on Povery.14 Mobiliy did no rise
beween he early 1970s and early 1990s despie rends ha Chety and his co-auhors’ daa sugges should have increased mobiliyincreasing educaional
atainmen, declining segregaion, and ederal programs argeed a reducing pov-
ery. I hese rends had no occurred, alling union membership along wih rising
inequaliy and single moherhood raes would likely have pushed down mobiliy.
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I is also imporan o examine he rend in mobiliy over a longer ime period
since 20 years is a relaively shor span. In a recen Naional Bureau o Economic
Research, or NBER, working paper, Brown Universiy economis Nahaniel
Hilger examines educaional mobiliy using U.S. Census Bureau daa going all he
way back o 1940.15 He also finds ha mobiliy as measured by child educaional
atainmen did no change among 22- o 25-year olds beween 1980 and 2000, bu his comes afer 40 years o growing mobiliy beween 1940 and 1980.16 In
oher words, he ailure o inergeneraional mobiliy o grow beween 1980 and
2000 represens a change rom rising mobiliy in he decades beore. Moreover,
as Harvard poliical scienis Rober Punam has argued, i may ake ime or he
ull effecs o growing inequaliy o be refleced in mobiliy saisics i a causal
relaionship exiss.17 Te same could be rue or unions.
Our findings rom boh he area and household levels sugges ha he decline o
union densiy over he pas 40 years along wih he increase in inequaliy and rise o
single mohers played a role in prevening mobiliy rom rising. Wha his impliesabou he uure rend or economic mobiliy is discouraging unless one expecs
a coninued decline in high school dropou raes and urher reducion in racial
segregaion o offse he effecs o rising inequaliy and alling union membership.
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Conclusion
In his repor, we have shown ha parens’ union membership has a significan
and posiive relaionship wih heir children’s well-being. Te adul offspring
o unionized parens earn higher labor incomes compared o he offspring o
nonunionized parens. Tey also atain higher levels o educaion, which can help
hem achieve beter economic sandings. Tis inergeneraional union effec is
sronger or less-educaed and less-skilled parens, making i a posiive orce or
inergeneraional mobiliy. An associaion also appears on he area level: Localiies
wih higher union membership are also areas where children o poor parens endup higher in he naional income disribuion and children hroughou he income
disribuion earn more in hese areas.
Te research in his repor is he firs o examine he relaionship beween unions
and inergeneraional mobiliy, bu hopeully i will no be he las sudy on his
opic. Researchers have produced a plehora o sudies on how alling union
membership has increased income inequaliy, and his repor will hopeully inspire
ohers o examine he relaionship beween unions and mobiliy in greaer deail.
Tis repor also provides lessons or policymakers who have, a leas rheorically,
embraced he concep o inergeneraional mobiliy. A serious policy agenda
aimed a boosing inergeneraional mobiliy mus include policies ha will
increase he bargaining power o workers. Te resuls rom his repor show ha
unions are a powerul orce or improving he economic lives no jus o organized
workers, bu o heir offspring as well. I is possible ha a srong union movemen
is no simply sufficien or high levels o inergeneraional mobiliy, bu i may be
necessary. I ha is he case, i will be difficul o meaningully increase inergen-
eraional mobiliy wihou also rebuilding unions or some comparable worker-
based organizaions.
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Appendix A: Area-level data
o perorm he analysis o unions and commuing zones, we linked wo area-
level daases. Te firs comes rom he “Inergeneraional Mobiliy Saisics and
Seleced Covariaes by Couny,” developed by Chety and his co-auhors rom
which mobiliy or low-income and all children daa were obained (available a
www.Equaliy-o-Opporuniy.org). Te second daase is Barry Hirsch and David
McPherson’s Curren Populaion Survey-based esimaes o union densiy or
meropolian saisical areas (available a www.UnionSas.com).
Maching he wo daases involved some echnical complicaions. Te mobil-
iy and income daa relae o counies and commuing zones, or CZs, which are
hemselves collecions o counies. Te union daa are available on he meropoli-
an saisical area, or MSA, level, which are also collecions o couniesexcep
in New England, as described below. Te geographic analysis akes place on he
CZ level. Te primary advanage o CZs over MSAs is ha he CZ file comes
wih sae idenificaion, which allows or he use o sandard errors clusered a
he sae level o accoun or spaial and sae-specific correlaions. Boh CZ and
MSAs ofen cross sae boundariesor example, he Washingon, D.C., MSA
and CZ cover counies in he Disric o Columbia, Virginia, and Maryland. Bu
he MSAs do no have sae IDs, and hus we canno use sae clusered sandard
errors wih hem. We assign o each couny he union densiy o he MSA o
which i belongs and hen combines he counies ino CZs, dropping counies
ha are no par o MSAs since here are no union daa or hem. Tis removes
rural counies rom CZs and creaes some sligh differences in he covariaes rom
he original daa eaured in Chety’s paper. Bu we do no believe his is a serious
problem: he correlaion beween mobiliy or low-income children esimaes
o our limied CZs and he whole CZs is 0.946. Addiionally, we reconsruc he
covariaes on he CZ-level only or counies or which here are also union daa.Te correlaion beween he five acors in our limied CZs and he whole CZs
ranges beween 0.937 and 0.980.
http://www.equality-of-opportunity.org/http://www.unionstats.com/http://www.unionstats.com/http://www.equality-of-opportunity.org/
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Anoher problem in orming he mobiliy/unionizaion area daase is ha he
unionizaion daa or he New England saes differ rom hose o he res o
he counry. Insead o MSAswhich are collecions o whole counieshey
are really New England Ciy and own Areas, or NECAs, which are collec-
ions o owns. Counies can hus belong o muliple NECAs. Fairfield Couny,
Connecicu, or example, belongs o he Danbury, Samord-Norwalk, andBridgepor NECAs. o deal wih his problem, we ake he average o he union
densiies o he NECAs o which each couny belongs rom UnionSas.com,
weighed by he porion o heir 2000 populaion ha lived in each NECA. For
Fairfield Couny, or example, we averaged he union densiies o he NECAs o
Danbury (13.2 percen), Samord-Norwalk (12.9 percen), and Bridgepor (22.8
percen) MSAs, weighed by heir 2000 populaions residing in Fairfield Couny
(183,303, 353,556, and 345,708, respecively).
Once we successully combined heir mobiliy and union daa a he couny level,
he nex sep was linking hem o several oher couny-level covariaes beoreurning hem ino CZs. Mos covariaes come rom Chety’s publicly available
older on www.Equaliy-o-Opporuniy.org: populaion; percen o children wih
a single moher; commue ime; high school dropou raes; he Gini coefficien;
social capial; a sae’s EIC coverage; and he progressiviy o he sae’s ax code.
Te SAA code in he older was used o produce couny-level esimaes o
hese variables, mached hem o he couny-level esimaes o mobiliy and union
densiy, and hen ransormed hem ino CZs. Chety and his co-auhors ound
ha he mos significan acors in heir analysis were single moherhood raes,
dropou raes, commue imes, social capial, and inequaliy among he botom
99 percen. We do no include he las covariaea Gini coefficien o he botom
99 percen o he couny’s income disribuionbecause i is based on nonpublic
ax daa and is no provided a he couny level. We use he overall Gini coefficien
insead. We hen added oher covariaes: indusry since some indusries are more
unionized han ohers, wih daa on indusries in Chety ’s raw daa older rom
he 2000 Census: ”Sex by Indusry or he Employed Civilian Populaion 16 Years
and Over.” We place he indusries ino five caegories.18 Muliple race variables
were also creaed. Using race daa rom he 2000 Census in he Naional Hisorical
Geographic Inormaion Sysem in Chety’s public daa older, variables or he
percenage o he commuing zone ha is non-Hispanic whie, non-Hispanic black, non-Hispanic Asian, non-Hispanic “oher,” and Hispanic were creaed.
Finally, we added U.S. Census daa rom 2000 on he child povery rae, average
number o children per amily, and he median value o owner-occupied housing.
http://www.equality-of-opportunity.org/http://www.equality-of-opportunity.org/
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Once we combined union, mobiliy, and oher covariae daa on he couny level,
we urned hem ino CZs. Lacking union daa ouside o MSAs, his analysis does
no apply o rural areas. Te oal populaion o our CZs in 2000 was 207 million
people compared o a U.S. populaion o 281 million in 2000.19 Tere is no way o
obain unionizaion raes or rural areas o see wheher he resuls o his repor do
or do no hold or hese areas.
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Appendix B: Area-level analysis
Tis repor uses he area-level daa or wo ypes o analysis.
Firs, he repor uses Chety’s preerred “absolue upward mobiliy” variable,
which measures he expeced rank in he 2011–2012 income disribuion o per-
sons rom he 1980–1982 birh cohor whose parens’ 1996–2000 income placed
hem in he 25h percenile o he naional income disribuion. Tis is reerred o
as mobiliy or low-income children.
Te ollowing model was used:
(1) R25 iO = β0 + β1U i
P + ∑ di X i + εi
In his model, i indexes commuing zone (CZ), o indexes offspring, and p indexes
heir parens. R25 iO measures he expeced rank o a 25h percenile child in 2011
and 2012. U i P measures he CZ’s union densiy in 1986, which is when he young
persons would have been 4 o 6 years old. Because union densiy by area is a sable
saisic across areas in relaive erms, he resuls are similar or union densiy over
oher ime periods. o reduce he poenial ha he effec o unionism will be con-
ounded wih ha o oher area variables, he X i vecor in he regression conrols
or a large se o covariaes, including many ha could be channels or unionism o
increase mobiliy: a commuing zone’s racial makeup, indusry makeup, Chety’s
and his co-auhor’s five acors, he number o children per amily, he child
povery rae, he median house value, he progressiviy o he ax code, and sae
Earned Income ax Credi, or EIC, coverage.
We firs perorm he univariae correlaion beween union densiy and mobiliy
or low-income children displayed in column 1. o assess he relaive srengh ohis correlaion beween mobiliy or low-income children and union densiy, we
compare i o he correlaion beween mobiliy or low-income children and he
five acors ha Chety ound o have he sronges relaionship wih mobiliy or
low-income children: he percen o children wih single mohers as parens; he
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income-adjused dropou rae; he level o social capial; he percen o work-
ers wih less han 15 minues commues, which is a measure o segregaion; and
inequaliy as measured by he Gini coefficien. As menioned in Appendix A and
endnoe 10, we use he overall Gini coefficien while Chety and ohers use he
Gini or he botom 99 percen. As done by Chety and his co-auhors, we normal-
ize all covariaes and mobiliy or low-income children so ha hey have a meano zero and sandard deviaion o one or beter comparison. Columns 2 hrough
7 show ha he correlaion beween mobiliy and union densiy is a leas as large
as he correlaion beween mobiliy and dropou raes, social capial, or segrega-
ion. Columns 8 and 9 repor he coefficiens rom he mulilevel regression o he
mobiliy or low-income children on union densiy and he oher covariaes. In
column 8, even afer conrolling or all five acors, union densiy sill shows a sig-
nificanly posiive associaion wih mobiliy or low-income children. In column 9,
we conrol or he five acors and several oher covariaes: race; indusry; median
housing value; he number o children per amily; ax progressiviy; he sae’s
EIC coverage; and he share o children living below he povery line. In hisspecificaion, union densiy sill remains significan.
Nex, we esimae he effec o union densiy in a commuing zone on he 2011–
2012 income o persons rom he 1980–1982 birh cohor who had resided in ha
zone by he ollowing model:
(2) LogȲ iO = β0 + β1U i
P + β2 LogȲ i P + ∑ di X i + εi
In his model, i indexes commuing zone (CZ), o indexes offspring, and p indexes
heir parens. Ȳ i P measures he average income o parens in he ih CZ rom 1996
o 2000, and Ȳ iO measures he average income o offspring who grew up in he same
CZ. As beore, he X i vecor in he regression conrols or a large se o covariaes.
As above, column 1 shows he relaionship beween union membership and
mobiliy or all children. A 10 percenage poin increase in union densiy is associ-
aed wih a 4.5 percen increase in children’s incomes. Columns 2 hrough 7 com-
pare he correlaions beween mobiliy or all children, union densiy, and he five
acors. Union densiy has a leas as large o a correlaion as he oher variables
wih he excepion o inequaliy. I also mainains a srong correlaion in each ohe mulivariae analyses in columns 8 and 9.
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TABLE A1
Unions, the five factors, and mobility for low-income children
Mobility for
low-income
children
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobility for
low-income
children,
normalized
Mobi
low-i
chil
norm
(1) (2) (3) (4) (5) (6) (7) (8) (
Union density12.90***
(4.579)
Union density,
normalized
0.333*** 0.386*** 0.2
(0.118) (0.131) (0.0
Percentage of
workers with a
commute under
15 minutes,
normalized
0.255*** 0.214** 0.1
(0.090) (0.090) (0.0
Overall Gini
coefficient,normalized
-0.367*** 0.123 -0.1
(0.112) (0.113) (0.0
Dropout rate,
income adjusted
and normalized
-0.274** -0.047 -0.1
(0.110) (0.088) (0.0
Social capital,
normalized
0.270** 0.044 -0.0
(0.132) (0.084) (0.0
Percentage of kids
with single mother,
normalized
-0.626*** -0.576*** -0.
(0.061) (0.078) (0.1
Other covariates No No No No No No No No Y
State clusteredstandard errors
Yes Yes Yes Yes Yes Yes Yes Yes Y
Observations 203 203 203 203 163 201 203 161 1
R-squared 0.111 0.111 0.065 0.135 0.070 0.073 0.392 0.540 0.7
Note: Cluster robust standard errors in parentheses. *** p
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TABLE A2
Unions, the five factors, and mobility for all children
Log child
income
Log child
income,
normalized
Log child
income,
normalized
Log child
income,
normalized
Log child
income,
normalized
Log child
income,
normalized
Log child
income,
normalized
Log child
income
Log
inc
(1) (2) (3) (4) (5) (6) (7) (8)
Log parent income0.442*** 3.424*** 3.921*** 3.392*** 3.647*** 3.120*** 3.232*** 0.422*** 0.
(0.033) (0.258) (0.285) (0.272) (0.313) (0.254) (0.269) (0.050) (0.0
Union density0.449*** 0.451*** 0.
(0.107) (0.124) (0.
Union density,
normalized
0.271***
(0.065)
Percentage of
workers with
commute under 15
minutes, normalized
0.270*** 0.021** 0.
(0.051) (0.009) (0.
Overall Ginicoefficient,
normalized
-0.310*** -0.011 -0.
(0.059) (0.011) (0.
Dropout rate,
normalized
-0.219*** -0.010 -0.
(0.078) (0.009) (0.
Social Capital,
normalized
0.260*** 0.002 -0.
(0.085) (0.012) (0.
Percentage of kids
with single mother,
normalized
-0.247*** -0.019* 0.
(0.053) (0.010) (0.
Other covariates No No No No No No No No
State clustered
standard errors Yes Yes Yes Yes Yes Yes Yes Yes
Observations 203 203 203 203 163 201 203 161
R-squared 0.687 0.687 0.687 0.709 0.656 0.668 0.668 0.803 0.
Note: Cluster robust standard errors in parentheses. *** p
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Appendix C: Individual household
data and analysis
Te Panel Sudy o Income Dynamics, or PSID, provides deail on he characeris-
ics o amilies, including he labor income and union saus o he head o house-
hold and o he head’s spouse and he comparable characerisics o heir adul
offspring when hey orm heir own households. o obain a sample o parens
and heir adul offspring, we mached he 1985 and 2011 PSID files by individual
and creaed a new file limied o individuals who were children or sepchildren o
he head o a household in 1985 and were hemselves heads o household or he
spouses o household heads in 2011. We also resric he sample o hose youngerhan 38 years old in 2011younger han 12 years old in 1985so ha hey are
young enough o be direcly influenced by parens’ economic saus. We creaed a
new se o 2011 offspring variables o characerize his group: characerisics o he
household heads i he individual was he head o household and characerisics o
he wives i he individual was he married or unmarried parner o he household
head. Tese offspring variables are designed o ocus on he relaionships beween
parens and heir children raher han beween parens and he spouses o heir
children. Because we limi heir analysis o heads o household and spouses, he
daa exclude children who were no heads o household or spouses, which consis
primarily o hose living wih heir parens in 2011.
We regress he log o offspring income on he log o heir parenal income and
oher parenal characerisics using he ollowing orm:
(3) LogY jk = β0 + β1U k P + β2 LogY k
P + ∑ dk X k P + ε jk
In his model, j indexes offspring and k indexes heir parens. Y is offspring’s labor
income.20 UP is heir parens’ union saus, where 1 means he parens are union-
ized and 0 ha hey are no in a union. Y P
is parens’ amily income and X P
rep-resens oher parenal atribues: parens’ age; race and ehniciy; heir ull-ime
saus; educaion; marial saus; indusry and occupaions; and he urban saus
o he household. I UP is significanly posiive, hen on average, he offspring o
union parens earn higher incomes han he offspring o nonunion parens.
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able 3 gives he resuls o he regressions o he log o offspring income on par-
ens’ atribues, including parens’ amily income.21 Te coefficien on he log o
amily income in column 1 is he inergeneraional income elasiciy, or IGE, ha
measures he associaion beween parens’ income and heir offspring’s income.22
Te esimaed coefficien o 0.326 indicaes ha i parens’ income increases by
10 percen, offspring’s labor income increases by 3.3 percen or all persons in hesample.23 Te addiion o he covariaes or parenal atribues reduces he coe-
ficien o 0.239 in column 2.
Column 3 examines he effec o having union parens on offspring income
absen amily income bu wih inclusion o oher parenal covariaes and deliv-
ers our main finding rom he individual-level daa: he aher’s union saus has a
significan effec on child income wih a magniude o 0.187, which implies ha
he adul offspring o unionized ahers earn 18.7 percen higher income han he
adul offspring o nonunionized ahers. Te addiion o parenal amily income in
column 4 reduces he coefficien on he union saus o parenal-household heado 0.164. Tis implies ha he effec o parens’ unionism goes beyond heir higher
income due o he union premium.
Finally, in columns 5 and 6, we add a dummy variable indicaing wheher he
offspring are unionized. Te esimaed coefficiens on parenal union saus and
parenal income do no change much afer we include offspring’s union saus,
which suggess ha parens’ union saus has an independenly posiive impac on
heir children’s income beyond wheher heir children join a union. Te esimaed
coefficien on children’s union saus shows ha hey earn a subsanial union pre-
mium. Compared o children whose parens and hemselves have no connecion
o unionism, children whose parens are unionized and hemselves are also union-
ized earn abou 37 percen (18.5 percen + 18.6 percen) higher labor incomes.
We also analyzed he effec o parens’ unionism conrolling or separae labor
incomes o household heads and heir spouses raher han conrolling or paren’s
amily income, and we find an even higher efficien coefficien on union ahers.24
We also examine he effecs o mohers’ and ahers’ union saus on daughers and
sons separaely in ables 4 and 5. Te relaionship is less precisely esimaed han
he above regressions since he sample size is abou hal. Te poin esimaes or heeffec o ahers’ union saus on sons are slighly smaller han in he pooled samples
while, mohers’ union saus appears o have no effec on sons’ labor incomes. For
daughers, we find he effecs o ahers’ union saus are larger han hose or sons,
and he effec o mohers’ union saus is also posiive bu no quie significan.
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Given he many pahways ha educaed and skilled workers are likely o have o
pass on heir economic advanages o heir children, i is imporan o deermine
wheher he union parens’ effec on heir offspring’s income is sronger among
less-educaed and less-skilled workers han among more-educaed and more-
skilled workers. In he ormer case, he union effec would reduce relaive social
mobiliy while in he later case he union effec would increase relaive mobiliy.
o examine his issue, we divided heir sample by level o educaionahers
wih no college educaion and hose wih a leas some college educaionand
by naure o workahers in blue-collar occupaions compared o ahers in
whie-collar occupaionsand esimaed equaion 3 and 4 or hese groups. We
only examine ahers in order o avoid he complicaions o marriages where one
parner has a college educaion or a whie-collar job while he oher has no college
educaion or a blue-collar job. We used a leas some college as he cuoff because
roughly hal o ahers had some college educaion, and he cuoff hus maximizes
sample size or boh groups. Te resuls, summarized in able 6 show ha heunion effec in raising he income o offspring is concenraed among ahers wih
less educaion and among ahers in blue-collar jobs. While one poenial explana-
ion is he large union wage premium or low-skilled workers, he inclusion o he
parenal household income variable, which should reflec he wage premium, sill
leaves a sizable independen union effec.
Our final research quesion in he individual-level daa is wha exen does he
effec o parens’ unionism show up in oher measures o socioeconomic well-
being? We examine his quesion by esimaing varians o equaions 3 and 4 ha
replace children’s labor income wih measures o educaional progresshighes
grade compleedand healh, as repored by individuals on a 1 o 5 scale wih 5
as he bes healh and 1 as he wors healh saus.
For he healh and educaion regressions, we condiion on a head o household
who works ull ime raher han a head o household or wie ha works ull ime
as in he oher regressions. Tis is in order o capure unions’ poenial role on
moher’s well-being hrough beter maerniy leave since a moher on maerniy
leave would no be couned as working ull ime. Unlike all he oher resuls
including he educaion resulshe healh resuls are sensiive o his adjusmenand do no display significan effecs i we condiion on eiher he household head
or wie working ull ime. We also drop he requiremen or he healh regressions
ha he children work ull ime since he beneficial effecs o unions on children’s
healh should no depend on heir labor marke saus. Te healh resuls are posi-
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27 Center for American Progress | Bargaining for the American Dream
ive bu no significan when we condiion on he child working ull ime and/or
condiion on a head o household or wie working ull ime. Columns 1 and 2 o
able 7 give he resuls or he educaion measure. Tey show ha having a union
aher increases highes grade compleed even or persons wih he same amily
income.25 Columns 3 and 4 o able 7 give he resuls or he healh measure o
offspring. Te healh saus o offspring is associaed wih boh heir moher’s andaher’s union saus. And, as in he calculaions or he highes grade compleed,
he resul or union ahers holds wih he addiion o amily income, implying
ha unionism improves offspring’s healh hrough mechanisms beyond parens’
income. Tis may reflec he beter healh care benefis ha unions provide mem-
bers and heir amilies.
TABLE A3
Unions and children’s earnings
Log childlabor income
Log childlabor income
Log childlabor income
Log childlabor income
Log childlabor income
Log chlabor in
(1) (2) (3) (4) (5) (6)
Log of family income, 19850.326*** 0.239*** 0.224*** 0.23
(0.074) (0.068) (0.070) (0.07
Union Father, 19850.187*** 0.164** 0.185*** 0.16
(0.062) (0.064) (0.060) (0.06
Union Mother, 19850.073 0.023 0.060 0.00
(0.087) (0.085) (0.085) (0.08
Union child
0.186*** 0.20
(0.059) (0.05
Other covariates No Yes Yes Yes Yes Ye
State clustered standard errors Yes Yes Yes Yes Yes Ye
Observations 1,068 1,068 1,068 1,068 1,068 1,06
R-squared 0.066 0.188 0.179 0.193 0.186 0.20
Note: Cluster robust standard errors in parentheses. *** p
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28 Center for American Progress | Bargaining for the American Dream
TABLE A4
Effect of parents’ union status on sons’ earnings
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log ch
labor in
(1) (2) (3) (4) (5) (6)
Log parent income
0.313*** 0.205 0.201 0.212
(0.098) (0.125) (0.129) (0.126
Union father0.142 0.125 0.133 0.115
(0.087) (0.087) (0.083) (0.083
Union mother-0.017 -0.054 -0.014 -0.053
(0.137) (0.137) (0.133) (0.132
Union child0.247** 0.260
(0.073) (0.07
Other covariates No Yes Yes Yes Yes Ye
State clustered standard errors Yes Yes Yes Yes Yes Ye
Observations 566 566 566 566 566 56R-squared 0.060 0.238 0.231 0.241 0.242 0.25
Note: Cluster robust standard errors in parentheses. *** p
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29 Center for American Progress | Bargaining for the American Dream
TABLE A6
Unions and mobility by fathers’ educational and occupational group
Noncollege-
educated
father
Noncollege-
educated
father
College-
educated
father
College-
educated
father
Blue collar
father
Blue collar
father
White collar
father
White
fat
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log child
labor income
Log
labor i
(1) (2) (3) (4) (5) (6) (7) (8
Union father0.275*** 0.195** 0.107 0.104 0.213*** 0.146** 0.067 0.
(0.083) (0.088) (0.086) (0.085) (0.075) (0.069) (0.100) (0.
Log father labor
income
0.284*** 0.059 0.293*** 0.
(0.066) (0.097) (0.069) (0.
Other covariates Yes Yes Yes Yes Yes Yes Yes
State clustered
standard errors Yes Yes Yes Yes Yes Yes Yes
Observations 435 435 479 478 498 497 416
R-squared 0.234 0.263 0.059 0.060 0.194 0.230 0.047 0.
Note: Cluster robust standard errors in parentheses. *** p
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30 Center for American Progress | Bargaining for the American Dream
About the authors
Richard Freeman holds he Herber Ascherman chair in economics a Harvard
Universiy and is a research associae a he Naional Bureau o Economic
Research in Cambridge, Massachusets.
Eunice Han is a proessor o economics a Wellesley College and a research ellow
a he Naional Bureau o Economic Research. Her research covers opics in labor
economics and he economics o educaion wih an emphasis on insiuions and
legal sysems. She currenly ocuses on he impac o unionism on he local labor
marke, especially wih regards o income inequaliy and economic mobiliy. She
received her Ph.D. in economics rom Harvard Universiy in 2013.
David Madland is he Managing Direcor o he Economic Policy eam and he
Direcor o he American Worker Projec a Cener or American Progress. He has
writen exensively abou he economy and American poliics on a range o opics,including he middle class, economic inequaliy, reiremen policy, labor unions,
and workplace sandards such as he minimum wage. His book, Hollowed Out:
Why the Economy Doesn’t Work without a Strong Middle Class , was published by he
Universiy o Caliornia Press in June 2015. Madland has a docorae in govern-
men rom Georgeown Universiy and received his bachelor’s degree rom he
Universiy o Caliornia, Berkeley.
Brendan V. Duke is a Policy Analys or he Cener or American Progress’ Middle-
Ou Economics projec. His research ocuses on economic inequaliy and eco-
nomic growh. He holds a maser’s degree in economics and public policy rom
Princeon Universiy’s Woodrow Wilson School o Public and Inernaional Affairs.
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31 Center for American Progress | Bargaining for the American Dream
Endnotes
1 Raj Chetty, Nathaniel Hendren, Patrick Kline, and Em-manuel Saez, “Where is the Land of Opportunit y? TheGeography of Intergenerational Mobility in the UnitedStates,” Quarterly Journal of Economics 129 (4) (2014):1553–1623.
2 Ibid.
3 David Madland and Nick Bunker, “Unions BoostEconomic Mobility in U.S. States” (Washington: Centerfor American Progress Action Fund, 2012), available athttps://www.americanprogressaction.org/issues/labor/report/2012/09/20/38624/unions-boost-economic-mobility-in-u-s-states/.
4 Bruce Western and Jake Rosenfeld, “How Much HasDe-Unionisation Contributed to the Rise in Male Earn-ings Inequality,” The American Sociological Review 4 (76)(2011): 513–537; David Card, Thomas Lemieux, and W.Craig Riddell, “Unions and Wage I nequality,” Journalof Labor Research 25 (2004); John DiNardo, Nicole M.Fortin, and Thomas Lemieux, “Labor Market Institu-tions and the Distribution of Wages, 1973–1992: ASemiparametric Approach,” Econometrica 5 (64) (1996):1001-1004; Richard B. Freeman, “How Much Has De-Unionisation Contributed to the Rise in Male EarningsInequality?” In Sheldon Danziger and Peter Gottschalk(eds.), Uneven Tides (New York: Sage Press, 1992), pp.133–163.
5 Western and Rosenfeld, “How Much Has De-Unionisa-tion Contributed to the Rise in Male Earnings Inequal-ity.”
6 Unions’ tendency to raise wages for nonunion workersbecause firms try to avoid unionization is called thethreat effect. Unions could also reduce wages fornonunion workers if union wages and benefits reducedemployment in the union sector, increasing the laborsupply in nonunion work; this is called the crowdingeffect. Evidence suggests that the threat effect domi-nates the crowding effect and that unions raise wagesfor nonunion workers. See Henry S. Farber, “NonunionWage Rates and the Threat of Unionization,” ILR Review 28 (3) (2005): 335–352.
7 Martin Gilens, Affluence and Influence: EconomicInequality and Political Power in America (Princeton, NJ:Princeton University Press, 2013), pp. 154–160.
8 James Cox and Ronald L. Oaxaca, “The Political Econo-my of Minimum Wage Legislation,” Economic Inquiry 20(4) (1982): 533–555.
9 Chetty, Hendren, Kline, and Saez, “Where is the Land ofOpportunity?”
10 Chetty and others, “Where is the Land of Opportunity?”finds a Gini coefficient of just the bottom 99 percent ofhouseholds has a stronger negative association withmobility than an overall Gini does and uses this bottom99 percent Gini as one of its five factors. We use theoverall Gini, however, because they do not provide abottom 99 percent Gini by county (which we need to
include it in our analysis because of the complicationsof combining with the union data), and it comes fromtheir federal tax data, so public data could not be used.See Appendix A for more details.
11 As described in the appendix, the health results aresensitive to the population analyzed. We find positiveand statistically significant results when we do not con-dition on the child working full time and only condition
on the head of household working full time (the latterto include union mothers on maternity leave). Thehealth results are positive but not sign ificant when wecondition on the child working full time and/or condi-tion on a head of household or wife working full time.
12 Raj Chetty and others, “Is the United States Still a Landof Opportunity? Recent Trends in IntergenerationalMobility,” American Economic Review Papers and Pro-ceedings 104 (5) (2014): 141–147.
13 Chetty, Hendren, Kline, and Saez, “Where is the Land ofOpportunity?”
14 Danny Vinik, “Is It Inequality or Mobility? Neither Econo-mists nor GOP Candidates Can Decide,” New Republic ,April 7, 2015, available at http://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequality.
15 Nathaniel G. Hilger, “The Great Escape: Intergenera-tional Mobility Sin ce 1940.” Working Paper 21217 (Cam-bridge, MA: National Bureau of Economic Research,2015).
16 Ibid.
17 Robert D. Putnam, Our Kids (New York: Simon & Schus-ter, 2015), p. 228.
18 Sectors are based on Zoltan Kenessey, “The Primary,Secondary, Tertiary And Quaternary Sectors Of TheEconomy,” Review of Income and Wealth 33 (4) (1987):359–385. Analysis with major industry categories yieldssimilar results.
19 Marc J. Perry and Paul J. Mackun, “Population Changeand Distribution” (Washington: U.S. Bureau of theCensus, 2001), available at https://www.census.gov/prod/2001pubs/c2kbr01-2.pdf.
20 To measure the direct effect of parents’ unionism onoffspring income, the authors focus on offspring’slabor income rather than the combined family incomeof married couples. The use of labor income drops
children who are self-employed status or out of laborforce.
21 The full results for all of the authors’ regression analysesare available upon request.
22 It is commonly understood that the higher value ofIGE, the lower the intergenerational mobility is. In oneextreme case, the IGE would be equal to zero if thereexists no relationship between family background andthe adult offspring income. Children born into a poorfamily would have the same likelihood of earning ahigh income as children born into a rich family.
23 Although the authors used labor income rather thanfamily income of offspring, this estimate is consistentwith literature. See Chetty and others, “Where is theLand of Opportunity?”; Chul-In Lee and Gary Solon,“Trends in Intergenerational Income M obility,” Review
of Economics and Statistics 91 (4) (2009): 766-772;Bhashkar Mazumder, “Fortunate Sons: New Es timatesof Intergenerational Mobility in the United States UsingSocial Security Earnings Data,”The Review of Economicsand Statistics 87 (2) (2005): 235-255. This literaturestates that the estimated IGE could be subject to theattenuation bias if the data focus on short-term periodsdue to the long-lasting transitory shocks to income.
http://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequalityhttp://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequalityhttp://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequalityhttp://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequalityhttp://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequalityhttp://www.newrepublic.com/article/121465/2016-presidential-candidates-face-challenge-talking-about-inequality
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24 If we control for separate labor incomes of bothparents, the coefficients on union father in Model 4, forexample, is 0.25 and is statistically significant at the 1percent of significance level. The coefficient on unionmothers remain insignificant.
25 In regressions with high school graduation as themeasure of schooling, the father’s unionism raises sons’high school graduation rate by a statistically significant4.4 percentage points.
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