Abstract
Innovation, which continually drives the US economy, is an enterprise that depends crucially on knowledge workers. In this study, we seek to understand how wage rigidity following the introduction of labor unions aff ect sorting, employment, wages, productivity, and the demand of labor, in a pivotal market of knowledge workers: academic scientists and engineers. While recent literature studies the effects of unions in the wider labor market, considerably less attention has been given to the knowledge economy. The knowledge economy is characterized by high labor mobility and significant heterogeneity in worker ability and effort, which are features that may amplify the labor market consequences of unionization. To address this gap, we use the staggered adoption of faculty and graduate student unions across U.S. universities to estimate both the short- and long-run effects of union recognition and contract ratification on key labor market outcomes at public and private institutions. We further leverage the timing of union legislation as a plausibly exogenous instrument to predict unionization, allowing us to estimate the causal impact of union exposure on knowledge-sector labor markets. By focusing on a highly skilled and innovation-critical workforce, we hope that this study informs policy makers on how unions and collective bargaining shape the performance and structure of the knowledge economy.