Department of Economics, UCSD

The paper tests for a link between unionization and research and development rates (research and development expenditures divided by output) in thirteen aggregate Canadian industries. A balanced panel of thirteen industries covering 1968 to 1986 reveals a negative relationship between industry unionization rates and research and development. The results hold when using a number of techniques to control for unobserved industry heterogeneity and non-linear responses to unionization. In an industry that moves from the 25th to the 75th percentile of unionization, research and development is predicted to fall by about 40%.