Posts Tagged ‘happiness’

Labor Unions and Happiness

There’s a fair amount of literature as to whether there is a causal relationship between labor union membership and higher wages, and the evidence is mixed. However, in a recent study (h/t In These Times), two political scientists from Notre Dame, Patrick Flavin and Benjamin Radcliff, and Alexander Pacek from Texas A&M, examine the relationship between labor union membership and subjective well-being, or happiness. They use individual and aggregate data from 14 countries.

Our findings strongly suggest that unions increase the life satisfaction of citizens, and that that this effect holds for non-union members as well. Moreover, we also find that labor organization has the strongest impact on the subjective well-being of citizens with lower incomes…We show these relationships to have an independent and separable impact from other economic, political, and cultural determinants. 

Their methodology seems sound, as they have a robust set of controls at both the aggregate and individual level- in aggregate, they control for social expenditure, GDP, and unemployment, and for individuals, they control for education, self-reported health, self-reported trust levels, and others. They use OLS, and in some specifications, interact union membership with income to see how the relationship varies with income. OLS certainly leaves the study prone to omitted variable bias, but they do their best with the controls mentioned above.

I find striking the result that union density has an equally strong effect on reported well-being of non-members. However, though American society may not value worker solidarity so high, that could be because we don’t have much of it. I think that this study is a great example of political scientists asking the right questions, both in their outcome variable and they key variable of interest. Subjective well-being is receiving more attention in economics, it seems, and perhaps this will lead policymakers to make decisions are metrics other than economic efficiency.

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