RESEARCH-AND-DEVELOPMENT AND UNIONISM - COMPARATIVE EVIDENCE FROM BRITISH COMPANIES AND ESTABLISHMENTS

U.S. research has found that unionization adversely affects research a nd development investment, consistent with the view that labor unions' rent-seeking activities act as a tax on innovation. In this U.K. stud y, preliminary analysis of two datasets (a cross-section of plants and a company panel for the years 1983-90) shows the same negative correl ation. This correlation completely disappears, however, when controls are included for such factors as cohort effects and the availability o f innovative technology in the industry. Moreover, R&D intensity appea rs to have been higher in enterprises where there were low levels of u nion density than in those where there was no union presence. Some evi dence suggests that the difference between U.K and U.S. results may be due to cross-country differences in the prioritization of non-pay iss ues in bargaining.