1. In a handout provided in class and available on the D2L site union density information for the United States was provided. Provide a summary of the important information provided in the graphs and discuss reasons for the declining trend in union membership in the United States. What are the major pieces of federal regulations we discussed in lecture pertaining to labor union activity? Why was the Homestead Strike important?
2. Answer each of the following:
a. Some argue that labor unions cause labor productivity to fall while others argue that they increase labor productivity. Provide arguments that might support each view.
b. An Excel file exists on D2L with each student’s name. The file is named “Medoff Data Set for (your name)”. The data includes time series as follows:
lny = the natural logarithm of the Y/L ratio
lnk = the natural logarithm of the K/L ratio
U = labor union density
T = trend
Using this file, estimate the Freeman-Medoff function discussed in lecture and provide an estimate for c. Discuss the regression results and comment on whether labor unions add or subtract from labor productivity using your empirical results,.

3. Answer each of the following:
a. Suppose that the employer concession schedule is W = 1 + 0.02S and the union resistance curve is W = 5 + 0.02S – 0.01S2 where W = the percentage wage increase and S = the expected strike length in days. Using the simple Hicks model, determine the length of the strike and the percentage wage increase.
b. What is a Hazard Function and how is it used to estimate strike length? What does the Kennan article predict using strike data and a hazard function?
4. Outline the major effects of unions by concentrating on the union wage effect, the threat effect, and wait unemployment. Why are unions not typically seen more in the skilled or professional fields?
5. Answer each of the following:
a. Outline the different types of unemployment. What are efficiency wages?
b. A presidential hopeful is campaigning to raise unemployment compensation benefits and lower the unemployment rate. Comment on the compatibility of these goals.