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JOURNAL LIC
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Research and Theory

Vol. 5, No. 3
July 1995

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J-PART

JOURNAL
PUBLIC
ADMI NISTRATI
Research and Theory

Vol.5, No. 3
July 1995

Sponsored by the:
Department of Public Administration, University of Kansas
Maxwell School of Citizenship and Public Affairs, Syracuse University
School of Public Administration, University of Southern California
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Journal of Public AdministrationResearch and Theory

July 1995 Volume 5, Number 3

ARTICLES

Organizations and Markets


HerbertA. Simon 273

Protective Service Unions, Political Activities,


and Bargaining Outcomes
TimothyD. Chandlerand Rafael Gely 295

Influencing Bureaucracy?A Research Note on Implications


of Measuring Participation in Public Utility Rate Cases
HeatherE. Campbell 319

Perceptual Effects of Participative, Goal-Oriented


Performance Appraisal: A Field Study in Public Agencies
FarzadMoussaviand DonaldL. Ashbaugh 331

Coping, Copying, and Concentrating:


OrganizationalLearning and Modernizationin Militaries
(Case Studies of Israel, Germany, and Britain)
Chris C. Demchak 345

BOOK REVIEWS

Proverbs of Administration
Christopher Hood and Michael Jackson:
AdministrativeArgument
Steven Maynard-Moody 377

Transformation and the Global Connection


Jean-Claude Garcia-Zamorand Renu Khator, eds.:
Public Administrationin the Global Village
Louis J. Baltz III 380

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J-PART
is abstractedor indexed in International Political Science
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Abstracts, Sage Human Resources Abstracts, Sage Public Administra-
tion Abstracts, Sage Urban Studies Abstracts, Sociological Abstracts,
Social Planning/Policy and Development, Social Sciences Index, US
Political Science Documents, and Work Related Abstracts, and is
available on microfilm from University Microfilms, Ann Arbor, Michigan.

ivlJournal of Public AdministrationResearch and Theory

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Protective Service Unions, Political Activities,
and Bargaining Outcomes
Timothy D. Chandler
Louisiana State University
Rafael Gely
Texas A&M University

ABSTRACT

We examinehow electoralpolitical activitiesby police and


firefighterunionsimpactpolice andfirefighterwages and employ-
ment. Thefindingsindicatethat the significantunion-nonunion
wage and employmentdifferentialsgenerallyassociated with a
collectivebargainingagreementdecrease when controllingfor
union involvementin electoralpolitics. Thoughsome differences
were observedbetweenpolice andfirefighters,electoralpolitical
activitiesappearto be importantdeterminantsof protectiveserv-
ice wages and employment.

Since the dramaticgrowthin public sector unionismthat


began in the 1960s, scholarsin laborrelationsand public admin-
istrationhave been interestedin the impactof public sector
unions on wages and employment(Ehrenbergand Schwarz 1986;
Freeman1986; Mentheand Perry 1980). Scholarsdoing work in
this area generallyhave estimateda reducedform of the demand
and supplyequationsfor municipallabor marketswith a single
dummyvariableincludedto representthe presenceof a public
sectorunion (Ehrenbergand Schwarz1986). These studiesfound
thatpublic sector unions have a positive, or at least a non-
negative, effect on wages and employment.
The authorsthank Peter Feuille, Paul
Jarley, and Larry Kahn for their helpful Recentstudieshave expandedthe measuresused to capture
comments and suggestions, and Chris the effects of public sector unions. Zax (1988), for example,
Parkerand Deanna Ross for their excel- categorizedunion strengthusing department-specific union char-
lent research assistance. Timothy D.
Chandlerthanks the Council on Research
acteristicsand bargainingpracticesin the municipality;he con-
at Louisiana State University for research cludedthatunion-nonunioncompensationdifferentials"increase
support. as employeesmove throughorganizationinto recognition,and as
cities move from non-bargainingto bargaining"(p. 315).
J-PART, 5(1995):3:295-318 Similarly,studiesby Zax and Ichniowski(1988) and Zax (1989)

295/Journal of Public AdministrationResearch and Theory

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ProtectiveService Unions

includedmultiplemeasuresof a union's presenceto measureits


impacton variousemployment-related issues. They foundthat
unions thatengage in collective bargainingwith a municipality
have greatereffects on wages, employment,and departmental
expendituresthando unionsthatdo not engage in collective
bargaining.

Despite advancementsin the union impactliterature,few


studiesincludedmeasuresof union politicalactivitiesin the
analyses.' This representsan importantgap in the literature,
becausethe effects of publicemployeeunions on wages and
employmentare generallyattributedto some combinationof
public sector unions' multilateralbargainingand politicalpower
(e.g., Freeman1986; Zax 1989; Zax and Ichniowski1988).

The importanceof public sector unions' politicalactivities


to union power is rootedin the very natureof the governmental
process. Becauseof the division of governmentalpower across
variousbranchesof governmentin the United Statesand the
often conflictingprioritiesof governmentofficials regarding
issues raisedin collective bargaining,multilateralbargaining
characterizespublic sector contractnegotiations.2Unions can
exploit this situation"byinducingofficials with interestssimilar
to their own to actively representtheirpositionin the manage-
ment policymakingprocess"(Kochan1974, 530). In addition,
public employeeunionscan engage in politicalactivitiesto
influenceelectoraloutcomes,therebyensuringthat government
officials will be favorablydisposedto their demands.

In this article, we examinehow police and firefighter


unions' electoralpoliticalactivitiesimpactpolice and firefighter
wages and employment.The findingscould have important
implicationsfor governmentadministrators who must contain
laborcosts in orderto cope with increasingfinancialconstraints
(Toulmin1988). If union politicalactivitiesare important
determinantsof positive union-nonunionwage and employment
differentials,containmentof union laborcosts may not be simply
an administrativematterthatcan be accomplishedthroughhard
'An exception is a recent article by bargainingin contractnegotiations.Containmentof the cost of
O'Brien (1992) that assesses the impact of
governmentservices may requirethe emergenceof taxpayer
public employee union political activity
on compensationand hours worked for groupscapableof counteringthe politicalpower of public
unionized workers. employeeunions.
2Kochan(1974, 526) defines multilateral
THEORY
bargaining "as a process of negotiation in
which more than two distinct parties are
involved in such a way that a clear Wage and employmentlevels are determinedas partof a
dichotomy between the employee and complexprocess in which varioustax and spendingpolicy deci-
managementorganizationdoes not exist. sions are also made (Gyourkoand Tracy 1991). These decisions

2961J-PART,July 1995

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Protective Service Unions

cruciallyaffect the provisionof governmentalservices and hence


public sector employmentconditions.The demandfor public
services is particularlyimportantto an understandingof the
marketfor public employees.

The demandfor public services dependson the fiscal


capacityof the city, the price of services, and the preferences
and tastes of the community(Duncombe1991). Moreover,unlike
privatesector marketswhere consumerdecisions are imple-
menteddirectlyby demandand supplyforces, consumerprefer-
ences for public services are implementedthroughpoliticaland
bureaucraticinstitutions,for instance,unions (Laddand Yinger
1989). Therefore,these politicalinstitutionsshouldinfluence
decisionsaboutthe deliveryof public services. Becausethe
demandfor public employeesarises from the demandfor public
services, the demandfunctionfor public employeesis definedby
the same factorsthat affect the marketfor public services.

Models of public sector labor marketsgenerallyassumethat


the supplyof labor in the public sector is upwardsloping; that is,
cities thatpay higherwages attractmore public employees(e.g.,
Edwardsand Edwards1982; Ehrenberg1973; Grosskopf,Hayes,
and Kennedy1985). The supplyof labor is specified as a func-
tion of publicemployees' wages, alternativeemploymentoppor-
tunities,characteristicsof the supplyof labor (educationlevels,
demographiccompositionof the population,etc.), and the bar-
gainingpower of public employees.

Obviously,publicemployeeunionsaffect the demandfor


public services and the supplyof laborto local government.
Publicemployeeunionscan exert politicalinfluenceon govern-
ment officials to increasedemandfor public services (Freeman
1986). Vote-maximizingpoliticiansare receptiveto union
politicalpressurebecausethey can tradefavorableemployment
conditionsfor union politicalsupport.Indeed,Bellanteand Long
(1981, 3) suggest that "sincepublic employeesare voters, the
highertheir wages, the more likely they are to vote for the
officials who providedthose wages."

Politicaloppositionby taxpayersto union demandsshould


be minimal,becausetaxpayersare likely to be "rationally
ignorant"of how theirtax money is spent (Downs 1957), and
3Similarly,employment concessions by becausepublic employeeunionscan presenttheir demandsas
local politicians can be sold to taxpayers
as "a desire for improved services rather partof the "union'sdesire for improvementsin services rather
than as coalition-buildingor a lack of thaneconomicopportunism"(Valletta1989, 432).3 Althoughnot
resolve in labor negotiations"(Valletta always explicitly stated,this view of public employeeunion
1989, 432). politicalactivityis prevalentin much of the literatureexamining

2971J-PART, July 1995

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ProtectiveService Unions

the impactof publicemployeeunions on wages and employment


(e.g., Edwardsand Edwards1982; Feuille and Delaney 1986;
Ichniowski1980; Trejo 1991; Zax 1989).

Unions also affect the supplyof labor throughtheir bar-


gainingactivities. Union-negotiatedcontractstypicallypermit
employerdiscretionin the selectionof workers(Flanaganet al.
1989). When a union negotiatesabove marketwages, there will
be a surplusof labor and large numbersof applicantsfor jobs
with union employers.Finally, althoughthis is not an issue with
protectiveservice unions, some unions directlylimit the supply
of laborthroughagreementsthatrequireemployersto hire only
union members.

Priorresearchsuggeststhatpolice and firefighterunions are


involvedactively in local politics (Stieber 1973; Zax and Ichni-
owski 1988). Therefore,to examinewhetherpublic employee
union politicalactivityis an importantdeterminantof union-
nonunionwage and employmentdifferentials,we focus on police
and firefighterunions' involvementin local electoralpolitics.

DATA

Data were collected on a nationalsampleof 614 cities with


populationsof 25,000 or more. Both the union data and union
politicalactivitiesdata are from the International
City ManagementAssociation's(ICMA's) "Labor-Management
Relations- 1988"survey;employment-related data are from the
ICMA's MunicipalYearBooks;and financialand sociodemo-
graphicdata are from variousU.S. governmentpublications.4
Becausethe 1988 ICMA survey asked questionscovering the
period from 1978 to 1988, cross-sectionaldata were collected on
the 614 cities for those years.

The separatecross sectionswere pooled for the analyses;the


largersamplesize providedmore precise estimatesof individual
variableeffects. Data missing on one or more of the variables
causedthe panel datato be unbalanced.Also, data missing on
4Datacollected as part of the ICMA's one or more variablesfor the entire surveyperiod reducedthe
Labor-ManagementRelations- 1988
survey were available for cities with
total numberof cities in the analyses. Four hundredtwenty-nine
populationsof 10,000 or more. Unfor- cities are includedin the police analysesand 393 are in the fire-
tunately, data for many of the socio- fighteranalyses.
demographicvariables were unavailable
for cities with populationsless than
25,000. Therefore, cities with populations
Respondentsto the 1988 ICMA survey answeredquestions
less than 25,000 were excluded from the aboutpolice and firefighterunionizationand whetherunions
analyses. A list of all the data sources can representingpolice and firefightershad engagedin specific
be obtained from the first author. politicalactivitiessince July 1, 1978. These data do not permit

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Protective Service Unions

identificationof the exact years in which unions engagedin


specific politicalactivities, nor do they describethe extent of
union involvementin political activities. Therefore,the occur-
rence and level of politicalactivityby police and firefighter
unions are assumedto be constantover the period from 1978 to
1988.

Of the 429 cities in the police analyses, 293 (68.3 percent)


had a police union, and of the 393 cities in the firefighter
analyses, 276 (70.2 percent)had a firefighterunion. Police and
firefighterunions were more likely to endorsepolitical candidates
thanto providecampaigncontributions.One hundredforty-nine
(50.8 percent)of the police unions endorsedpolitical candidates
and 110 (37.5 percent)madecampaigncontributions.Similarly,
139 (50.4 percent)of the firefighterunions endorsedpolitical
candidates,and 124 (44.9 percent)made campaigncontributions.

Exhibit 1 lists the variablesused in the wage and employ-


ment analyses, theirmeans, and their standarddeviations.

EMPIRICAL MODEL

Demand for Public Employees

Demandfor publicemployees is generallyspecifiedto be a


functionof the price of the service, the community's"taste"for
the service, and the community'sabilityto pay. Further,because
public employeeunionsuse their politicalpower to increase
demandfor public services, the presenceof a politicallyactive
union representsan importantcomponentof the demandfunction.

The price of public services is in partdependenton the


wages of protectiveservice employees(lnWAGE).Demandfor
labor will decreaseas the price of labor (lnWAGE)increases.
Ability to pay and taste for governmentservices can be repre-
sentedby per capitaincome of local residents(lnINC) and the
medianvalue of housingwithinthe municipality(lnHOUS). The
variableslnINC and lnHOUSare expectedto positively affect
demandfor public employees. In addition,municipalpopulation
(lnPOP)and populationdensity(lnDEN), which representthe
possibilityof economiesof scale in the productionprocess and
affect the costs of public services, shouldbe positively associated
with the demandfor public employees.

Union politicalactivity is representedby two variables:(1) a


dummyvariablemeasuringwhetherthe protectiveservice union
endorsedcandidatesfor elective office duringthe 1978-1988

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Exhibit 1
Variable Definitions, Means, and Standard Deviations*

Variable Measured As

DEPENDENT VARIABLES
InEMPLOY The naturallog of total police (firefighter)employment per 10,000 population (M = .681,
S.D. = .316, Police; M = .379, S.D. = .440, Firefighters).

lnWAGE The naturallog of the average of the minimumand maximumwages of police (firefighters)
(M = 2.189, S.D. = .278, Police; M = 1.85, S.D. = .304, Firefighters).

INDEPENDENT VARIABLES
BARGLAWP An index variable measuringthe favorablenessof (BARGLAWF)a state's laws toward collec-
tive bargainingby police (firefighters). The index was created as follows. First, values were
assigned to each city depending on the favorablenessof a state's laws toward police (firefighter)
bargaining. The following coding was used: 1 = bargainingprohibited;2 = no provision for
bargaining;3 = bargainingpermitted;4 = right to meet and confer or present proposals; 5 =
conferral rights and requiredmediationor factfinding;6 = duty to bargain; 7 = duty to bar-
gain and requiredfactfinding or mediation;and 8 = duty to bargain and requiredarbitration.
Second, the mean and standarddeviation of t'ePsevalues was computed across cities (M =
5.797, S.D. = 2.492, Police; M = 5.719, S.D. = 2.475, Firefighters), and a standardizedZ
score was formed as the index measure (M = 0.0, S.D. = 1.0, Police; M = 0.0, S.D. = 1.0,
Firefighters).
CITYMGR A dummy variable equal to 1 if the municipalityoperates under a city managerform of
government (M = .771, S.D. = .419, Police; M = .769, S.D. = .421, Firefighters).
InDEN The naturallog of the numberof municipal residents per square mile (M = 8.000, S.D. =
.622, Police; M = 7.988, S.D. = .619, Firefighters).
InHOUS The naturallog of the median value of housing in the municipality(M = 10.906, S.D. = .447,
Police; M = 10.857, S.D. = .437, Firefighters).
InINC The naturallog of per capita income of municipal residents (M = 9.173, S.D. = .299, Police;
M = 9.158, S.D. = .289, Firefighters).

INDEP Metro status dummy variables for independentand suburbanwith central city as the reference
SUBURB category. (INDEP: M = .099, S.D. = .299, Police; INDEP: M = .108, S.D. = .311, Fire-
fighters; SUBURB: M = .384, S.D. = .486, Police; SUBURB: M = .322, S.D. = .467,
Firefighters).
NRTHEAST Regional dummy variables for Northeast, Midwest, and West, with South as the reference
MIDWEST category (NRTHEAST: M = .062, S.D. = .242, Police; NRTHEAST: M = .061, S.D. =
.240, Firefighters; MIDWEST: M = .316, S.D. = .465, Police; MIDWEST: M = .307,
S.D. = .461, Firefighters;WEST: M = .321, S.D. = .467, Police; WEST: M = .300, S.D.
= .458, Firefighters).
InOPW The naturallog of the average hourly wage of manufacturingproductionworkers in the
municipality (M = 2.035, S.D. = .235, Police; M = 2.038, S.D. = .238, Firefighters).
PCTBLK Percentage of the municipalpopulationthat is black (M = 10.004, S.D. = 13.220, Police;
M = 10.965, S.D. = 13.619, Firefighters).

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Protective Service Unions

Exhibit 1 (continued)

PCTHS Percentage of the municipalpopulationhaving at least a high school education (M = 72.397,


S.D. = 11.417, Police; M = 71.321, S.D. = 10.912, Firefighters).
PCTMANUF Percentage of the local labor force employed in manufacturing(M = 20.506, S.D. = 9.343,
Police; M = 20.253, S.D. = 9.184, Firefighters).
POLCBA A dummy variable equal to 1 if there is a collective bargainingagreementbetween a city and a
(FFCBA) police (firefighter) union (M = .606, S.D. = .488, Police; M = .620, S.D. = .485, Fire-
fighters).
PCBALAW An interactionterm between the POLCBA (FFCBA) and BARGLAWP (BARGLAWF)
(FCBALAW) variables (M = .178, S.D. = .644, Police; M = .204, S.D. = .643, Firefighters).
POLCONT An index variable measuringpolice (firefighter)union campaign contributionsto local
(FFCONT) politicians during the 1978-1988 period. The variable was formed by combining information
from two survey items: whether the union provided manpoweror in-kind campaign contribu-
tions during the 1978-1988 period (yes = 1, no = 0) and whether the union provided financial
campaign contributionsduring the 1978-1988 period (yes = 1, no = 0). The index variable
ranges in value from 0 to 2 (et = .649, for Police; et = .673, for Firefighters) [M = .394,
S.D. = .720, Police; M = .514, S.D. = .799, Firefighters].
POLENDOR A dummy variable equal to 1 if organized police (firefighters)endorsed candidatesfor public
(FFENDOR) office in any local election during the 1978-1988 period (M = .346, S.D. = .476, Police;
M = .358, S.D. = .479, Firefighters).
InPOP The naturallog of municipalpopulation(measuredin thousands) [M = 4.074, S.D=.710,
Police; M = 4.115, S.D. = .735, Firefighters].
YEARi A series of dummy variables representingthe year in which the independentvariables are
measured; 1978 is the excluded group.

*Municipal per capita income data (InINC) were available for every other year from 1977-1985; data for even
numberedyears, ti, were estimated by assuming ti = (ti-1 + t+ 1)/2; 1985 data were used for 1986-1988.
Average manufacturingproductionworkers' wage data (InOPW)were available for years 1977, 1982, and 1987;
data for other years were estimated assuming the hourly wage in a city in year t had the same relationshipto the
state average hourly wage in year t and year t-1. Populationdata for 1979 are used for 1978. Data for 1980 are
used for area per square mile (used to calculate populationdensity), percentageof the municipalpopulationthat
is black (PCTBLK), median value of housing (InHOUS), percentageof the labor force employed in manufactur-
ing (PCTMANUF), and percentage of the populationwith at least a high school education (PCTHS).

period (POLENDOR,FFENDOR)and (2) an index variable


measuringprotectiveservice union campaigncontributionsto
5TheICMA survey also asked whether
local unions engaged in 1) mismanage-
politicalcandidatesduringthe 1978-1988period (POLCONT,
ment disclosure threats, 2) state-level FFCONT).5The union campaigncontributionvariablewas
lobbying, 3) publicity campaigns, and formedby combininginformationfrom two survey items: (1)
4) taking issues to referendum.Because whetherthe union providedmanpoweror in-kindcampaigncon-
these political activities are more indirect
methods of influencing the local collective
tributionsto candidatesfor elective office duringthe 1978-1988
bargainingenvironmentthan is involve- period and (2) whetherthe union providedfinancialcampaign
ment in electoral politics, we have contributionsto candidatesfor elective office duringthe 1978-
excluded them from the analyses. 1988 period. For each item, the responseswere yes (1) or no (0).

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These two items were addedto create the union campaigncontri-


butionmeasurerangingfrom zero to two.6

A distinctioncan be madebetweenendorsementsand contri-


butionsin termsof the commitmentor cost to the union of
engagingin eithertype of activity. Endorsementsare fairly
inexpensivein termsof the organizationalresourcesnecessaryto
providethem. Further,endorsementscan be made withoutsub-
stantialinvolvementin a candidate'selection campaign.In
contrast,campaigncontributionscan resultin considerablecost
to the union. By financiallycontributingto a campaign,or by
pressuringunion membersto work in the campaign,the union is
committingmore organizationalresources.

Regardlessof its form, union politicalsupportcan be used


to elect candidateswho are sympatheticto union demands.Even
if a prounioncandidateis not elected, union involvementin elec-
toralpolitics can makeelected officials reluctantto engage in
behaviorsthatare detrimentalto public employeeunions. Thus,
POLENDOR(FFENDOR)and POLCONT(FFCONT)should
positivelyaffect the demandfor public employees.

Supply of Labor to Local Government

The supplyof laborto local governmentis specified as


being positivelyrelatedto public employeewages (InWAGE)and
to the availabilityof workerswith the skills or tastes to work in
variousgovernmentoccupations.The supplyof labor to local
governmentis negativelyrelatedto measuresof the favorableness
of alternativeemploymentopportunitiesand to the bargaining
power of public employeeunions.

The averagewage rate of local manufacturing production


workers(lnOPW)and the percentageof the local labor force
employedin manufacturing (PCTMANUF)representthe quality
and availabilityof alternativeemploymentopportunitiesand
shouldnegativelyaffect the supplyof labor to local government.
The percentageof the populationthat is black (PCTBLK)and the
percentageof the populationwith at least a high school education
6We also attemptedto include in the anal-
(PCTHS)representthe possibilitythatworkers'skills or tastes
ysis separatevariables for union financial for employmentin the protectiveservices may vary. For
contributionsand union in-kind contribu- instance,Ehrenberg(1973) notes thatonly a small proportion
tions. Doing so produced strange results of firefightersis nonwhite.In additionto indicatingpossible
because of multicollinearityamong the
union political activity variables. This
discrimination,this may also indicatethat "nonwhitesderive
problem is avoided when union political extremelylow nonpecuniarybenefitsfrom fire protectionemploy-
contributionsare representedby a single ment . . ." (Ehrenberg 1973, 39). Thus, assuming similar argu-
variable. ments apply to police, the percentageof municipalresidentswho

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are black shouldnegativelyaffect the supplyof labor to the


protectiveservices. In contrast,the percentageof the population
with at least a high school educationshouldbe positively asso-
ciated with the supplyof labor to the protectiveservices (Smith
and Lyons 1980).

Representingthe impactof union bargainingpower are


variablesthatmeasurethe presenceof a collective bargaining
agreementbetweena city and a protectiveservice union
(POLCBA,FFCBA),7the favorablenessof a state's law toward
collectivebargainingby protectiveservice employees
(BARGLAWP,BARGLAWF),8and the interactionbetweenthe
collective bargainingagreementand state collective bargaining
'Year-specific contractdata were not
available. We know only when the city
law variables(PCBALAW,FCBALAW).
first signed a collective bargainingagree-
ment with the protective service union, Controllingfor unionpoliticalactivity, a collective
and we assume the existence of a collec- bargainingagreementbetweena city and a protectiveservice
tive bargainingagreement since that time.
union shouldrepresentthe multilateralbargainingpower of
8To measure the effects of a state's bar- unionizedprotectiveservice employees. Thus, POLCBA
gaining law, a function-specific index (FFCBA)shouldbe negativelyassociatedwith the supplyof
variable was created using the NBER's laborto local government.
Public Sector Collective BargainingLaw
Data Set (Valletta and Freeman 1988). To
create the variable, state laws were A favorablecollective bargaininglaw should increaseunion
divided into eight categories: duty to bargainingpower and create greaterthreateffects on nonunion
bargainand requiredarbitration;duty to employersto matchunion
wage gains, therebyincreasingthe
bargainand requiredfactfindingor
mediation;duty to bargain;conferral wages of nonunion employees. Thus the favorablenessof a state's
rights and requiredfactfinding or media- law towardcollective bargainingby protectiveservice employees
tion; right to meet and confer or present (BARGLAWP,BARGLAWF)shouldbe negativelyassociated
proposals; bargainingpermitted;no pro- with the
supplyof laborto local government.The collective
vision; and bargainingprohibited.
Following Freeman and Valletta bargaining variableis interactedwith the bargaininglaw variable
(1988), the legal categories were summar- (PCBALAW, FCBALAW)to examinewhetherthe law's effect
ized with a single monotonic index repre- on labor supplydependson the presenceof a collective bargain-
senting the favorableness of the function-
ing agreementbetweena protectiveservice union and a munici-
specific laws to collective bargaining.The
legal environmentin a city department pality.
(police or firefighter) was assigned a
value from 8 (most favorable, i.e., duty Other Supply and Demand Factors
to bargainand arbitrationrequired)to 1
(least favorable, i.e., bargaining
prohibited). We then computed the mean Also includedare three additionalcharacteristicsof the
and standarddeviation of these values locality thatmay affect labor supplyand demandand hence
across cities and formed a Z score as our public employees' wages and employment.These characteristics
index measure. We did this to give "more
extreme values to categories that differ
are form of government(CITYMGR);regionallocationof the
greatly from the mean in their ratingand municipality(NRTHEAST,MIDWEST,WEST); and metropoli-
that are relatively rare"(Freeman and tan status(INDEP, SUBURB). Finally, year dummyvariables
Valletta 1988, 83). (YEAR;)control for the effects of time on wages.

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The following reducedform equation,which is based on the


above discussion,can be used to obtainestimatorsof the
regressionparameters:

(eq. 1) InWAGE = f(InINC,InHOUS,POLENDOR[FFENDOR],


InEMPLOY POLCONT[FFCONT],POLCBA[FFCBA],
BARGLAWP PCBALAW
[BARGLAWF],
[FCBALAW],InOPW,PCTMANUF,PCTBLK,
PCTHS,InDEN,InPOP,CITYMGR,
NRTHEAST,MIDWEST,WEST,INDEP,
SUBURB,YEARj)+ e.

As has been noted in prior research that utilizes pooled cross-


sectional data, pooling causes problems in the error structure,
which leads to violations of basic OLS assumptions (e.g.,
Delaney, Fiorito, and Masters 1988; Feuille and Delaney 1986).
Fortunately,an errorcomponentsmodel can be used to overcome
these problems.9

The dependentvariablesare the naturallog of the averageof


'The error components model assumes the minimumand maximumhourlywages of police (firefighters)
that the error term for a given munici-
pality comprises three components: a [lnWAGE],and the naturallog of police (firefighter)employment
component that varies from year to year per 10,000 population(lnEMPLOY). ' Variablesthat are posi-
but is identical for all observations in any tively associatedwith demandfor public employees will posi-
year; a component that is the same in any
tively affect wages and employment.Variablesthat are positively
year but varies across individualcities;
and a purely randomdisturbancefor each associatedwith the supplyof labor to local governmentwill
municipalityin each year. negativelyaffect wages and positively affect employment,and
Year dummy variables are included in those that are.negativelyassociatedwith the supplyof labor will
the estimating equation to capturethe
time effect. This obviously assumes that
positively affect wages and negativelyaffect employment.
year-specific effects are identical for all
cities in any year. The city-specific and ESTIMATION AND RESULTS:
randomcomponents can be estimated. REDUCED FORM ESTIMATES
Because the panel data used in these
analyses are unbalanced,a modified error
components model suggested by Carliner Police and Firefighter Wages
(1982) was used; this model provides
generalized least squares (GLS) estimators The full GLS wage resultsfor police and firefightersare
of the regression parameters.
presentedin AppendicesA and B, respectively.Estimateswere
'"TheICMA does not report average obtainedwith and withoutthe politicalactivityvariablesincluded
police and firefighter wages. in the equation.Exhibit2 presentsGLS resultsfor the police and
firefightercollective bargaining,politicalactivity, and law
"Because we have included a variable
representingthe interactionbetween a
variables.
collective bargainingagreement and a
state's bargaininglaw (PCBALAW, Police. When union politicalactivitiesare not accounted
FCBALAW), the POLCBA (FFCBA) for (column 1), a collective bargainingagreementbetweena
coefficient estimates representthe
effects of a collective bargaining
police union and a municipality(POLCBA)has positive, signifi-
agreement on wages (employment) in cant effects on wages."'When political activitiesare accounted
states having the average bargaininglaw for (column2), the effects of a collective bargainingagreement
(i.e., PCBALAW [FCBALAW] = 0). are nonsignificant.Moreover,neitherpolice union endorsements

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Exhibit 2
Reduced Form Wage Equation, GLS Coefficient Estimates:
Collective Bargaining, Political Activity, and Law Variables

InWAGE InWAGE
Coeff. (S.E.) Coeff. (S.E.)
Variable Name (1) (2)

POLICE

(1) POLCBA .015*** .008


(.005) (.005)

(2) BARGLAWP .037*** .037***


(.003) (.003)

(3) PCBALAW .004 .002


(.004) (.005)

(4) POLENDOR -- .008


(.006)

(5) POLCONT -- .005


(.004)

FIREFIGHTERS

(6) FFCBA .006 -.006


(.007) (.007)

(7) BARGLAWF .048*** .049***


(.004) (.004)

(8) FCBALAW -.016*** -.017***


(.006) (.006)

(9) FFENDOR -- .032***


'2Thesignificant effect of a police (.009)
bargaininglaw on wages in nonbargain-
(10) FFCONT -- -.006
ing departmentsis representedby
BARGLAWP. The effect of a police (.005)
bargaininglaw on wages in departments ***Significantat the .01 level; **significantat the .05 level; all tests are two-tail.
where there is a collective bargaining
agreementbetween the police union
and the municipalityis determined
using the following equation:
b = aInWAGE/aBARGLAWP= of political candidates (POLENDOR) nor police union campaign
+
bBARGLAWP bpcBALAW (1),
contributions to political candidates (POLCONT) significantly
and the standarderror is
s =
[var(bBARGLAWP) + (12)var(bPCBALAW)
increase wages (column 2). However, the results indicate that the
+ 2( 1)cov(bBARGAWP ,bPCBALAW)] . favorableness of a state's police bargaining law has positive,
Both the column (1) and column (2) re- significant effects on police wages in nonbargaining and
sults indicate that the favorablenessof a
state's police bargaininglaw significantly
bargaining departments.12
and positively affects wages in bargaining Firefighters. In cities located in states having the average
departments[b=.041, s=.003, column bargaining law (i.e., FCBALAW = 0), a collective bargaining
(1); b=.039, s=.003, column (2)]. agreement between a firefighters' union and a municipality

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(FFCBA)does not significantlyaffect wages. However, the


favorablenessof a state's firefighterbargaininglaw has positive,
significanteffects on firefighterwages in nonbargainingand
bargainingdepartments,but the effects are significantlyhigher in
nonbargainingdepartmentsthanin bargainingdepartments.13Per-
haps the presenceof a favorablebargaininglaw increasesthreat
effects on nonunionemployersto improvewages more than it
increasesunion bargainingpower. Finally, the column2 results
indicatethat firefighterunion endorsementsof politicalcandidates
(FFENDOR)increasewages by approximately3 percent.

In general, resultsfor the othervariablesin the equationare


as expected(see AppendicesA and B). Medianvalue of housing
(lnHOUS),per capitaincome (lnINC), populationdensity of the
municipality(lnDEN), and the percentageof the local labor force
employedin manufacturing (PCTMANUF)all have significant,
positive effects on protectiveservice employees' wages. The
averagewage of local manufacturing workers(lnOPW)has posi-
tive and significanteffects on firefighterwages but nonsignificant
effects on police wages.

Wages are also significantlyhigher if the city has a city


managerform of government(CITYMGR)ratherthan some
other form of government,if the city is suburban(SUBURB)
ratherthancentral,and if the city is locatedin the Northeast,
West, or Midwestratherthanthe South. Moreover,municipal
population(lnPOP)is positivelyand significantlyassociatedwith
protectiveservice wages. Finally, wages are significantlylower
in independentmetropolitanareas (INDEP)than in centralmetro-
politanareas.

Police and Firefighter Employment

The full GLS employmentresultsfor police and firefighters


are presentedin AppendicesA and B, respectively.Estimates
were obtainedwith and withoutthe politicalactivityvariablesin
the equation.The GLS resultsfor the police and firefighter
collective bargaining,politicalactivity, and law variablesare
presentedin exhibit 3.
'3Thesignificant effect of a firefighter
bargaininglaw on wages in nonbargaining
departmentsis representedby
BARGLAWF. Using equations similar to Police. Whenunion politicalactivitiesare not accountedfor
those described in n. 12, both the column (column 1), a collective bargainingagreementbetweena police
(1) and column (2) results indicate that union and a municipality(POLCBA)positively and significantly
the favorablenessof a state's firefighter
bargaininglaw significantly and positively
affects employment.Whenunion politicalactivitiesare accounted
affects wages in bargainingdepartments for (column2), the positive, significantemploymenteffects of
[b=.032, s=.006, column (1); b=.032, a collective bargainingagreementdisappear.However, candi-
s=.005, column (2)]. date endorsements(POLENDOR)and campaigncontributions

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Exhibit 3
Reduced Form Employment Equation, GLS Coefficient
Estimates: Collective Bargaining, Political Activity,
and Law Variables

InEMPLOY InEMPLOY
Coeff. (S.E.) Coeff. (S.E.)
Variable Name (1) (2)

POLICE
(1) POLCBA .057*** .015
(.011) (.013)
(2) BARGLAWP -.048*** -.049***
(.007) (.007)
(3) PCBALAW -.006 -.020**
(.010) (.010)
(4) POLENDOR -- .057***
(.014)
(5) POLCONT -- .032***
(.009)
FIREFIGHTERS
(6) FFCBA .174*** .085***
(.019) (.021)
(7) BARGLAWF -.074*** -.076***
(.013) (.013)
(8) FCBALAW -.008 -.034
(.019) (.019)
(9) FFENDOR -- .094***
(.025)
(10) FFCONT -- .098***
(.015)
atthe.01level;**significant
***Significant atthe.05level;alltestsaretwo-tail.

(POLCONT) by a police union positively and significantly affect


employment (column 2). If a police union endorses candidates for
public office and provides both financial and in-kind campaign
contributions, employment per 10,000 population increases by
approximately 12 percent. The results also indicate that the
favorableness of a state's police collective bargaining law has
significant, negative effects on employment in nonbargaining and

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bargainingcities, but the effects are greaterin bargainingcities


thannonbargainingcities.14

Firefighters.A collective bargainingagreementbetween a


firefighters'union and a municipality(FFCBA)has a significant,
positive effect on employmentregardlessof whetherunion polit-
ical activitiesare accountedfor (columns 1 and 2). However,
includingmeasuresof unionpoliticalactivitiesin the analysis
reducesthe FFCBAcoefficientestimateby about50 percent.
Both firefighterunion endorsementsof political candidates
(FFENDOR)and candidatecampaigncontributions(FFCONT)
significantlyincreaseemployment(column2). Firefighter
employmentper 10,000 populationis approximately29 percent
higherwhen the firefighterunion endorsescandidatesfor public
office and providesboth financialand in-kindcampaigncontri-
butions."5Finally, more favorablefirefighterbargaininglaws
(BARGLAWF)have significant,negativeeffects on firefighter
employmentin nonbargainingand bargainingdepartments.16

In addition,resultsshown in AppendicesA and B indicate


thatper capitaincome (lnINC)has positive and significanteffects
on employment.Municipalpopulation(lnPOP)and the median
value of housing (lnHOUS)have positive, significanteffects on
'4Thesignificant effect of a police bar- police employmentand negative, significanteffects on firefighter
gaining law on employment in nonbar-
gaining departmentsis representedby employment.The resultsalso indicatethatpopulationdensity
BARGLAWP. Using equations similar to (lnDEN) has a positive, significanteffect on police employment;
those described in n. 12, both the column that significantdifferencesin employmentexist across regions
(1) and column (2) results indicate that and metropolitantypes; and thatpolice employmentis signifi-
the favorablenessof a state's police
bargaininglaw significantly and nega- cantlyhigherin cities havinga city managerform of government
tively affects employment in bargaining (CITYMGR)ratherthan some other form of government.
departments[b=-.051, s=.007, column
(1); b=-.066, s=.007, column (2)]. The percentageof the local labor force employedin manu-
'5Ourresults indicatingthat firefighter facturing(PCTMANUF)and the percentageof the municipal
unions have substantiallylarger effects populationwith at least a high school education(PCTHS)have
than police unions on employment are negativeand significanteffects on protectiveservice employment.
consistent with prior research (Spizman
Finally, the averagewage of local manufacturing production
1980a and 1980b; Trejo 1991; Zax and
Ichniowski 1988). workers(lnOPW)negativelyand significantlyaffects police
employment,and the percentageof the populationthat is black
'6Thesignificant effect of a firefighter (PCTBLK)positively and significantlyaffects police and fire-
bargaininglaw on employment in non-
fighteremployment.
bargainingdepartmentsis representedby
BARGLAWF. Using equations similar to
those described in n. 12, both the column ADDITIONALANALYSES: STRUCTURALESTIMATES
(1) and column (2) results indicate that
the favorablenessof a state's firefighter
bargaininglaw significantly and nega-
The reducedform estimatespresentedin exhibits2 and 3
tively affects employment in bargaining measurethe total effects of a collective bargainingagreementand
departments[b=-.082, s=.014, column protectiveservice union politicalactivitieson wages and employ-
(1); b=-. 110, s=.014, column (2)]. ment. These total effects are the sum of the direct effects of

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unions on wages (employment)and their indirecteffects on


wages (employment)via their effects on employment(wages).
Consequently,these resultsconfoundthe supplyand demand
componentsof the local labormarket,makingit impossibleto
determinehow protectiveservice unionizationand political
activitiesdirectlyaffect labor supplyand demand.

To avoid the ambiguitiesinherentin the reducedform


estimates,the supply(wage) and demand(employment)structural
equationswere estimated.A two-stageleast squares(2SLS)
procedurewas used to accountfor the possiblejoint determina-
tion of wages and employment.Based on the earlier discussionof
supply(wage) and demand(employment)in municipallabor
markets,the following equationswere specified:

(eq. 2) InWAGE = POLCBA[FFCBA],BARGLAWP


f(lnEMPLOY,
[BARGLAWF], PCBALAW[FCBALAW],
InOPW,PCTMANUF,PCTBLK,PCTHS,
CITYMGR,NRTHEAST,MIDWEST,WEST,
INDEP,SUBURB,YEARj)+ e.

(eq. 3) InEMPLOY= f(lnWAGE,InINC,InHOUS,POLENDOR


[FFENDOR],POLCONT[FFCONT],InDEN,
InPOP,CITYMGR,NRTHEAST,MIDWEST,
WEST,INDEP,SUBURB,YEARj)+ e.

To estimatea simultaneous-equations model using pooled


cross-sectionaldata, the reducedform of the wage and employ-
ment equationswas first estimatedusing OLS. The predicted
values obtainedfrom the OLS wage and employmentestimations
were then includedin the employmentand wage structuralequa-
tions, respectively.The structuralequationswere estimated
using the errorcomponentstechniqueemployedfor the earlier
analyses.17

The full results are presented in Appendix C. Exhibit 4


shows results for the collective bargaining, political activity, and
law variables.

Police and Firefighter Wages

'7As noted by Maddala (1977), when


The structuralwage resultsindicatethat a collective bar-
implementingthe 2SLS procedure with gaining agreementbetweena police union and a city does not
pooled cross-sectional data, "it is only significantlyaffect police wages. In contrast,a collective
necessary to get consistent estimates of bargainingagreementbetween a firefighters'union and a city
the reduced form parameters"(p. 332).
Thus the reduced form equations can be
positively and significantlyaffects firefighterwages. However,
estimatedusing OLS. The structuralesti- the positive effect of a collective bargainingagreementon
mates then can be obtained using the firefighters'wages decreasesas the favorablenessof a state's
error components method. collective bargaininglaw increases.

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Exhibit 4
Structural Wage and Employment Equations, GLS Coefficient
Estimates: Collective Bargaining, Political Activity,
and Law Variables

InWAGE InEMPLOY
Coeff. (S.E.) Coeff. (S.E.)
Variable Name (1) (2)

POLICE
(1) POLCBA .005 -_
(.005)
(2) BARGLAWP .064*** --
(.003)
(3) PCBALAW -.009 -_
(.005)
(4) POLENDOR -- .051***
(.015)
(5) POLCONT -- .060***
(.010)
FIREFIGHTERS
(6) FFCBA .014** --
(.007)
(7) BARGLAWF .061*** --
(.005)
(8) FCBALAW -.016** --
(.007)
(9) FFENDOR --.138***
(.025)
(10) FFCONT --.115***
(.016)
atthe.01level;**significant
***Significant atthe.05level;alltestsaretwo-tail.

8Thesignificant effects of police and


firefighter bargaininglaws on wages in The results also indicate that the favorableness of a state's
nonbargainingdepartmentsare represent-
ed by BARGLAWP and BARGLAWF, collective bargaininglaw positively and significantlyaffects
respectively. Using equations similar to protectiveservice wages.'8In the case of firefighters,however,
those described in n. 12, the effects of a the positive effects of a collective bargaininglaw are significantly
state's police and firefighter bargaining
laws on wages in bargainingdepartments
largerin nonbargainingdepartmentsthan in bargainingdepart-
are positive and significant (b=.055, ments. The firefighterresultssuggest that increasingthe favor-
s=003, police; b=.045, s=.006, fire- ablenessof a state's collective bargaininglaw has greaterpositive
fighters). threateffects on wages in nonbargainingdepartmentsthan it has

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on a union's abilityto increasewages throughthe exercise of


bargainingpower.

As indicatedin AppendixC, the averagewage of local


manufacturing workers(lnOPW),the percentageof the local
labor force employedin manufacturing (PCTMANUF),the
percentageof the municipalpopulationhavingat least a high
school education(PCTHS),and protectiveservice employment
(lnEMPLOY)all have positive and generallysignificanteffects
on protectiveservice wages. The positive, significantPCTHS
coefficientestimatecontradictsthe hypothesis.Ratherthan
increasethe supplyof laborto the protectiveservices, the
percentageof local residentswith at least a high school education
appearsto decreasethe supplyof labor. This might be due to the
greaternumberof alternativeemploymentopportunitiesavailable
to personshavinghigherlevels of education.

Wages are also higherif the city has a city managerform of


government(CITYMGR)ratherthansome other form of govern-
ment, if the city is suburban(SUBURB)ratherthancentral, and
if the city is locatedin the Northeast,Midwest, or West rather
thanin the South. In contrast,wages are significantlylower in
independentmetropolitanareas (INDEP)than in centralmetro-
politanareas.

Interestingly,the percentageof the municipalpopulationthat


is black (PCTBLK)has significant,negativeeffects on police
wages and significant,positive effects on firefighterwages. The
firefighterresultsare consistentwith earlierresearchthat indi-
cates thatblacks may not have a strongpreferencefor firefighter
employment(Ehrenberg1973). In contrast,the police results sug-
gest thatthe percentageof local residentswho are black is posi-
tively associatedwith the supplyof laborto police departments
(i.e., blacks have a preferencefor police employment).

Police and Firefighter Employment

The structuralemploymentresultspresentedin exhibit4


indicatethatendorsementsof politicalcandidatesand political
campaigncontributionspositively and significantlyaffect police
and firefighteremployment.Moreover,political activitiesby
firefighters'unions appearto be more effective thanpolitical
activitiesby police unions. These resultsare consistentwith
earlierobservationson the effectivenessof police and firefighter
unions' politicalactivities(Stieber 1973).

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Results shown in AppendixC indicatethatmunicipalpopu-


lation (InPOP),populationdensity (InDEN),and per capita
income (InINC)all have generallypositive and significanteffects
on protectiveservice employment.Employmentis also higher in
cities with a city managerform of government(CITYMGR)
ratherthan some other form of governmentand in cities located
in the Northeast,Midwest, or West ratherthan in the South. As
for the effects of metropolitanstatus,police employmentis
significantlylower in suburban(SUBURB)and independent
metropolitan(INDEP)areasthanit is in centralcities. Firefighter
employmentis significantlylower in suburbanmetropolitanareas
but significantlyhigherin independentareas.

Finally, medianvalue of housing(lnHOUS)and protective


service wages (InWAGE)have negativeand generallysignificant
effects on protectiveservice employment.The negative, signifi-
cant effects of medianvalue of housingon firefighteremploy-
ment contradictsthe hypothesis.Perhapsthe medianvalue of
housingis negativelyassociatedwith the incidenceof fires, thus
decreasingdemandfor firefighters.

CONCLUSION

Otherstudiesexaminingthe impactof public employee


unions on wages and employmenthave used a collective bargain-
ing agreement(or a union) as a proxy for both union multilateral
bargainingand union politicalpower. Ourdata allow us to
separatethese two effects. Thus we are able to examinewhether
public employeeunionscan use theirpoliticaland multilateral
bargainingpower to simultaneouslyincreasewages and employ-
ment, contraryto the traditionalassumptionthatthe "union
unilaterallydeterminesthe wage and the firm is then free to
adjustemploymentto the profit-maximizinglevel on the demand
curve"(Hirschand Addison 1986, 10).

The reducedform resultsproducedsome interestingfindings


regardingthe impactof protectiveservice unions and union polit-
ical activitieson wages and employment.A collective bargaining
agreementbetweena police union and a municipalemployerhas
positive and significanteffects on wages when we do not account
for union politicalactivities, and it has nonsignificanteffects
when we accountfor union politicalactivities. Moreover,neither
police union campaigncontributionsto politicalcandidatesnor
police union endorsementsof politicalcandidatessignificantly
affect wages. Althougha collective bargainingagreement
betweena firefighterunion and a municipalemployerdoes not
significantlyincreasewages, firefighterunion endorsementsof

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Protective Service Unions

politicalcandidatesdo significantlyincreasewages. These results


provideevidence of the importanceof union politicalpower as a
determinantof positive union-nonunionwage differentialsin the
protectiveservices.

With regardto employment,a collective bargainingagree-


mentbetweena police union and a municipalityhas significant,
positive effects on employmentwhen union political activitiesare
not accountedfor, and it has nonsignificanteffects when union
politicalactivitiesare accountedfor. Police union endorsements
of politicalcandidatesand campaigncontributions,however,
have significant,positive effects on employment.For firefighters,
a collective bargainingagreementwith a municipalitysignifi-
cantly and positivelyaffects employment.Candidateendorse-
ments and campaigncontributionsby a firefighterunion also
have significant,positive effects on employment.These results
suggest thatunion politicalpower, not union multilateral
bargainingpower, is primarilyresponsiblefor positive union-
nonunionemploymentdifferentialsin the protectiveservices.

The reducedform resultsalso providesome interesting


findingsfor the effects of state collective bargaininglaws on
protectiveservice wages and employment.Both police and fire-
fightersbenefit in the form of higher wages from the presenceof
more favorablecollective bargaininglaws. For firefightersthe
benefitsare significantlylargerin nonbargainingdepartments
thanbargainingdepartments.In contrast,the favorablenessof a
state's collective bargaininglaw has negativeand significant
effects on protectiveservice employment,and for police the
effects appearto be significantlylarger in bargainingdepartments
than in nonbargainingdepartments.The positive wage effects and
negativeemploymenteffects associatedwith favorablebargaining
legislationsuggest that such legislationis negativelyassociated
with the supplyof laborto protectiveservices.

Our resultssupportthe view thatpublic employeeunions are


able to use theirpoliticalpower to increasedemandfor their
services. Moreover,becausepoliticalaction is an important
determinantof public sector collective bargainingoutcomes,
wage and employmentlevels in unionizeddepartmentsare likely
to be consistentwith the vote-maximizationgoals of government
officials. Therefore,desiredreductionsin the cost of operating
governmentwill occur only if taxpayersare able to counterthe
politicalpower of public employeeunions.

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Protective Service Unions

APPENDIX A
Reduced Form GLS Estimates: Policea

Variable InWAGE InWAGE InEMPLOY InEMPLOY


Name Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.)

InPOP .040*** .037*** .057*** .037***


(.004) (.004) (.008) (.009)
InDEN .043*** .042*** .027*** .025***
(.003) (.003) (.008) (.008)
InOPW .014 .015 -.050** -.045
(.011) (.010) (.025) (.024)
InHOUS .075*** .075*** .090*** .089***
(.009) (.009) (.021) (.021)
InINC .111**.11*** .596*** .595**
(.012) (.012) (.029) (.028)
PCTBLK .251E-3 .230E-3 .005*** .005***
(. 171E-3) (. 170E-3) (.039E-2) (.390E-3)
PCTMANUF .002*** .002*** -.006*** -.006
(.268E-3) (.268E-3) (.619E-3) (.614E-3)
PCTHS -.470E-4 -.433E4 -.013*** -.013
(.335E-3) (.335E-3) (.775E-3) (.768E-3)
NRTHEAST .045*** .051 *** .165*** .208***
(.009) (.009) (.020) (.020)
MIDWEST .163*** .165*** -.035** -.027
(.007) (.007) (.016) (.016)
WEST .177*** .177*** -.049*** -.045
(.007) (.007) (.017) (.017)
INDEP -.046*** -.047*** .057*** .052***
(.007) (.007) (.016) (.016)
SUBURB .050*** .049*** -. 151 *** -. 159***
(.006) (.006) (.013) (.013)
CITYMGR .051 *** .052*** .045*** .052***
(.005) (.005) (.01 1) (.01 1)
BARGLAWP .037*** .037*** -.048*** -.049
(.003) (.003) (.007) (.007)
POLCBA .015*** .008 .057*** .015
(.005) (.005) (.011) (.013)
PCBALAW .004 .002 -.006 -.020**
(.004) (.005) (.010) (.010)
POLENDOR -- .008 -- .057***
(.006) (.014)
POLCONT -- .005 -- .032***
(.004) (.009)
INTERCEPT -.700*** -.685*** -4.961*** -4.866***
(.109) (.110) (.253) (.250)
Nh 3209 3209 3209 3209
Nc 429 429 429 429

aResultsfor the year dummyvariablescan be obtainedfrom the authors.All tests are two-tail.
bCity-yearobservations. cNumberof cities includedin the analysis.
**p ' .05; ***p ' .01.

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APPENDIX B
Reduced Form GLS Estimates: Firefightersa

Variable InWAGE InWAGE InEMPLOY InEMPLOY


Name Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.)

InPOP .050*** .047*** -.053*** -.093


(.005) (.005) (.014) (.014)
InDEN .071*** .072*** .015 .021
(.005) (.005) (.014) (.014)
InOPW .095*** .100*** .011 .050
(.014) (.014) (.043) (.042)
InHOUS .119*** .122*** ,.142*** -.147
(.012) (.012) (.037) (.036)
InINC .068*** .064*** .780*** .742***
(.017) (.017) (.051) (.050)
PCTBLK .294E-3 .357E-3 .006*** .006***
(.238E-3) (.238E-3) (.704E-3) (.689E-3)
PCTMANUF .003*** .003*** -.002** -.003
(.372E-3) (.372E-3) (.001) (.001)
PCTHS .702E-3 .891E-3 -.014*** -.012
(.460E-3) (.463E-3) (.001) (.001)
NRTHEAST .276*** .285*** .416*** .514***
(.011) (.012) (.034) (.034)
MIDWEST .163*** .164*** -.020 -.035
(.009) (.009) (.027) (.027)
WEST .095*** .093*** -.003 -.028
(.010) (.010) (.028) (.028)
INDEP -.071 *** -.069*** .220*** .185***
(.009) (.009) (.027) (.026)
SUBURB .069*** .067*** -.360*** -.377***
(.008) (.008) (.024) (.023)
CITYMGR .072*** .073*** .012 .033
(.006) (.006) (.018) (.018)
BARGLAWF .048*** .049*** -.074*** -.076
(.004) (.004) (.013) (.013)
FFCBA .006 -.006 .174*** .085***
(.007) (.007) (.019) (.021)
FCBALAW -.016*** -.017*** -.008 -.034
(.006) (.006) (.019) (.019)
FFENDOR -- .032*** -- .094***
(.009) (.025)
FFCONT -- -.006 -- .098***
(.005) (.015)
INTERCEPT -1.615*** -1.631*** -4.080*** -3.773***
(.153) (.154) (.453) (.444)
Nb 2882 2882 2882 2882
Nc 393 393 393 393

aResultsfor the year dummyvariablescan be obtainedfrom the authors.All tests are two-tail.
hCity-yearobservations. 'Numberof cities includedin the analysis.
**p < .05; ***p < .01.

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APPENDIX C
2SLS GLS Estimates: Police and Firefighters Wages and Employmenta

InWAGE InEMPLOY
Variable Police Firefighters Police Firefighters
Name Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.) Coeff. (S.E.)

lnPOP -- -- .114*** -.031


(.010) (.016)
InDEN -- -- .177*** .174***
(.010) (.020)
lnHOUS -- -- -.013 -.275***
(.021) (.035)
lnINC -- -- .588*** .715***
(.033) (.059)
POLENDOR -- -- .051*** .138***
(FFENDOR) (.015) (.025)
POLCONT -- -- .060*** .115***
(FFCONT) (.010) (.016)
lnOPW .004 .057*** -- --
(.011) (.016)
PCTBLK -.948E-3*** .675E-3** -- --
(.197E-3) (.283E-3)
PCTMANUF .004*** .002*** -- --
(.298E-3) (.402E-3)
PCTHS .003*** .002*** -- --
(.285E-3) (.395E-3)
CITYMGR .062*** .091 .132*** .094***
(.005) (.007) (.013) (.020)
NRTHEAST .025*** .290*** .209*** .853***
(.009) (.015) (.024) (.085)
MIDWEST .213*** .216*** .055** .128***
(.007) (.011) (.025) (.048)
WEST .239*** .197*** .118*** .079
(.007) (.011) (.029) (.047)
INDEP -.073*** -.154*** -.077*** .067**
(.007) (.010) (.020) (.033)
SUBURB .086*** .138*** -.079*** -.335***
(.005) (.008) (.016) (.026)
BARGLAWP .064*** .061*** -- --
(BARGLAWF) (.003) (.005)
POLCBA .005 .014** -- --
(FFCBA) (.005) (.007)
PCBALAW -.009 -.016** -- --
(FCBALAW) (.005) (.007)
InEMPLOY .337*** .110*** -- --
(.018) (.026)
lnWAGE -- -- -1.632*** -1.322***
(.129) (.222)
INTERCEPT 1.064*** .876*** -3.456*** -2.491***
(.035) (.041) (.242) (.480)
Nb 3209 2882 3209 2882
Nc 429 393 429 393
aResultsfor the year dummyvariablescan be obtainedfrom the authors.All tests are two-tail.
hCity-yearobservations. cNumberof cities includedin the analysis.
**p C .05; ***p C .01.

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