Length of Service and Layoffs in Union and Nonunion Work Groups

Abstract

This paper presents survey evidence from about 200 firms that protection against job loss grows with employees' length of service even after controlling for the perceived net value of employees to the firm. As would be expected, senior workers are better protected against permanent layoff in union than in nonunion firms, but even in the absence of unionism, longer service generally translates into extra protection. Among the private sector hourly work units outside of agriculture and construction represented in the authors' survey, seniority led to additional protection against job loss in 97 percent of groups covered by a union contract and in 86 percent of uncovered groups. Importantly, however, the extra protection was considerably stronger in the average union group than in the average nonunion group.