This paper examines the construction equipment resale market to assess whether equipment produced by the world's largest manufacturer of construction machinery, Caterpillar, experienced lower product quality in facilities that underwent contract disputes during the 1990's. Analysis of auction data reveals that resale market participants significantly discounted machines produced in these dispute-affected facilities. Additionally, pieces of equipment produced in facilities undergoing unrest were resold more often, received worse appraisal reports, and had lower list prices. Taken together, the evidence supports the hypothesis that workmanship at dispute-affected facilities declined and that the resulting impact on the economic quality of the equipment produced was significant. The dispute was associated with at least $400 million in lost service flows due to inferior quality equipment alone. Copyright 2008, Wiley-Blackwell.

Several theories suggest that pay raises below a reference point will reduce job performance. Final offer arbitration for police unions provides a unique opportunity to examine these theories, as the police officers either receive their requested wage or receive a lower one. In the months after New Jersey police officers lose in arbitration, arrest rates and average sentence length decline, and crime reports rise relative to when they win. These declines in performance are larger when the awarded wage is further from the police union's demand. The findings support the idea that considerations of fairness, disappointment, and, more generally, reference points affect workplace behavior.

This paper asks whether pay disclosure in the public sector changes wage setting at the top of the distribution. I examine a 2010 California mandate that required municipal salaries to be posted online. Among top managers, disclosure led to approximately 7 percent average compensation declines, and a 75 percent increase in their quit rate, relative to managers in cities that had already disclosed salaries. The wage cuts were largely nominal. Wage cuts were larger in cities with higher initial compensation, but not in cities where compensation was initially out of line with (measured) fundamentals. The response is more consistent with public aversion to high compensation than the effects of increased accountability.

We employ a discrete choice experiment in the employment process for a national call center to estimate the willingness to pay distribution for alternative work arrangements relative to traditional office positions. Most workers are not willing to pay for scheduling flexibility, though a tail of workers with high valuations allows for sizable compensating differentials. The average worker is willing to give up 20 percent of wages to avoid a schedule set by an employer on short notice, and 8 percent for the option to work from home. We also document that many job-seekers are inattentive, and we account for this in estimation. (JEL J22, J31, J80, L84)

This paper provides a case study of the effect of labor relations on product quality. We consider whether a long, contentious strike and the hiring of replacement workers at Bridgestone/Firestone’s Decatur, Illinois, plant in the mid‐1990s contributed to the production of defective tires. Using several independent data sources and looking before and after the strike and across plants, we find that labor strife at the Decatur plant closely coincided with lower product quality. Monthly data suggest that defects were particularly high around the time concessions were demanded and when large numbers of replacement workers and returning strikers worked side by side.

We estimate the effect of new private-sector unionization on publicly traded firms' equity value in the United States over the 1961–1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market data. Event-study estimates show an average union effect on the equity value of the firm equivalent to $40,500 per unionized worker, an effect that takes 15 to 18 months after unionization to fully materialize, and one that could not be detected by a short-run event study. At the same time, point estimates from a regression discontinuity design—comparing the stock market impact of close union election wins to close losses—are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings.

We study peer effects in the workplace. Specifically, we investigate whether, how, and why the productivity of a worker depends on the productivity of coworkers in the same team. Using high-frequency data on worker productivity from a large supermarket chain, we find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. Additionally, workers respond more to the presence of coworkers with whom they frequently interact. We conclude that social pressure can partially internalize free-riding externalities that are built into many workplaces. (JEL J24, L81, M54)

We survey the evidence on whether racial attitudes negatively affected Barack Obama’s vote share in the 2008 presidential election. There is some evidence pointing toward this possibility. First, the increase in the Democratic vote share in the presidential election between 2004 and 2008 was relatively smaller in Appalachia and some Southern states. Second, there was a significantly smaller 2004–2008 growth in votes for the Democratic presidential candidate than Democratic House of Representatives candidates. While these patterns are consistent with the possibility that racial attitudes lowered the number of votes for Obama, a more complete examination of available data casts doubt on this interpretation. We examine whether Barack Obama underperformed in parts of the country where voters are more racially biased, on average. Specifically, we test whether the loss of votes experienced by Obama (compared to John Kerry) relative to the votes that one may have predicted based on the general increase in the number of Democratic votes in House elections between 2004 and 2008 was larger in states where the white population is more racially biased, on average. We measure racial attitudes using data from the General Social Survey on the fraction of white voters who support anti-interracial-marriage laws. We find little evidence that Obama underperformed relative to congressional Democrats in states that have a white electorate with stronger racial bias. We also find little evidence that turnout was higher among segments of the