Stansbury’s research focuses on topics in labor and macro economics, particularly on issues to do with inequality, power, and institutions in the labor market. In recent work, she has studied the extent of employer concentration in the US labor market, the macroeconomic effects of the decline of worker power in the US, and the incentives for minimum wage non-compliance in the US and the UK.

Abstract 

This paper provides a comprehensive assessment of the margins along which manufacturing firms in Norway respond to increased union density, using legislative changes in the tax deductibility of union dues as a quasi-exogenous shock to firm-level unionization rates. In response to higher labor costs induced by unionization, the average firm increases employment and reduces estimated labor markdowns, passes on the increased labor cost in higher consumer prices, and sees no decline in profitability. This is consistent with incremental increases in unionization (i) countervailing firm monopsony power and (ii) redistributing from consumers to workers, rather than from shareholders to workers. Increased unionization also causes substantial reallocation of employment and revenues toward larger, more productive, more profitable, and more unionized firms. We synthesize these findings through a partial-equilibrium model of firm decision-making that incorporates union bargaining, product-market price-setting power, and labor market monopsony power.