This paper examines how household indebtedness shapes union participation in the United States, using PSID data (1999–2021) and the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act as a natural experiment: households above their state median income lost access to Chapter 7 bankruptcy, raising the cost of consumer debt. Treated households deleveraged, and their union participation fell on the margin made financially meaningful by state labor law: entry into union-covered jobs in non-Right-to-Work states, and retention of formal membership in Right-to-Work states. Our findings show that personal balance sheets and labor law jointly shape workers' collective representation.
Keywords: Unionization; Union Jobs; Personal Debt; Bankruptcy Reform; Right to Work
JEL classification: J50 J51 K35
Download