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Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation

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  • Brian D. Bell
  • Michael K. Pitt

Abstract

This paper assesses the impact of changes in union density on the male structure in the UK over the 1980s. Using four separate data sets, we estimate the kernel density of hourly wages for men. Counterfactual densities are then generated to predict how the distribution of wages has changed over time because of the decline in union membership. We find that approximately 20 percent of the increase in the variance of log wages over the period can be attributed to changes in unionisation. The effect is particularly strong in the latter part of the period. We also present disaggregated estimates of the impact of declining unionisation. Our results are robuts across all the data sets we examine and similar results are obtained if union coverage is used rather than union membership.

Suggested Citation

  • Brian D. Bell & Michael K. Pitt, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    • Handle: RePEc:bla:obuest:v:60:y:1998:i:4:p:509-528
    DOI: 10.1111/1468-0084.00111
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    Cited by:

    1. Walsh, Frank & Strobl, Eric, 2009. "Recent Trends in Trade Union Membership in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 117-138.
    2. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2009. "Wage Dispersion in a Partially Unionized Labor Force," GEMF Working Papers 2009-09, GEMF, Faculty of Economics, University of Coimbra.
    3. David Johnston & Wang-Sheng Lee, 2011. "Explaining the Female Black-White Obesity Gap: A Decomposition Analysis of Proximal Causes," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1429-1450, November.
    4. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    5. Holmes, Craig & Mayhew, Ken, 2015. "Have UK Earnings Distributions Polarised?," INET Oxford Working Papers 2015-02, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    6. A Charlwood & K Hansen & David Metcalf, 2000. "Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay," CEP Discussion Papers dp0452, Centre for Economic Performance, LSE.
    7. Fei Peng & Lili Kang, 2013. "Labor Market Institutions and Skill Premiums: An Empirical Analysis on the UK, 1972-2002," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 959-982.
    8. Alana Gilbert & Euan Phimister & Ioannis Theodossiou, 2003. "Low Pay and Income in Urban and Rural Areas: Evidence from the British Household Panel Survey," Urban Studies, Urban Studies Journal Limited, vol. 40(7), pages 1207-1222, June.
    9. Susan Hayter, 2015. "Unions and collective bargaining," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 4, pages 95-122, Edward Elgar Publishing.
    10. Gosling, Amanda, 2003. "The Changing Distribution of Male and Female Wages, 1978-2000: Can the Simple Skills Story be Rejected?," CEPR Discussion Papers 4045, C.E.P.R. Discussion Papers.
    11. Pischke, Jorn-Steffen & Dinardo, John & Hallock, Kevin F, 2000. "Unions And The Labour Market For Managers," CEPR Discussion Papers 2418, C.E.P.R. Discussion Papers.
    12. Pannenberg, Markus & Wagner, Gert G., 2001. "Why Do Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being Evidence for the West Germany and Great Britain," IZA Discussion Papers 318, Institute of Labor Economics (IZA).
    13. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    14. Donna Brown & Peter Ingram & Jonathan Wadsworth, 2004. "Everyone's A Winner? Union Effects on Persistence in Private Sector Wage Settlements: Longitudinal Evidence from Britain," School of Economics Discussion Papers 1104, School of Economics, University of Surrey.
    15. Michael Ollinger & Friedrich L. Sell, 2017. "What Determines Union Density? A Political Economy Model of the Labor Market with Empirical Evidence in the Context of European Countries," Review of Economics & Finance, Better Advances Press, Canada, vol. 10, pages 18-32, November.
    16. Metcalf, David & Hansen, Kirstine & Charlwood, Andy, 2000. "Unions and the sword of justice: unions and pay systems, pay inequality, pay discrimination and low pay," LSE Research Online Documents on Economics 20195, London School of Economics and Political Science, LSE Library.
    17. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2007. "The Impact of Deunionisation on Earnings Dispersion Revisited," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 337-363, Emerald Group Publishing Limited.
    18. Cai, Lixin & Liu, Amy Y.C., 2015. "Wage determination and distribution in urban China and Vietnam: A comparative analysis," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 186-203.
    19. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Kölling, Arnd, 2017. "Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. Much Ado about Nothing?," GLO Discussion Paper Series 24, Global Labor Organization (GLO).
    20. Busso, Matias & DiNardo, John & McCrary, Justin, 2009. "New Evidence on the Finite Sample Properties of Propensity Score Matching and Reweighting Estimators," IZA Discussion Papers 3998, Institute of Labor Economics (IZA).
    21. Sell, Friedrich L. & Öllinger, Michael, 2017. "Reward effects and incentive effects on the labor market: Empirical evidence for European countries," Working Papers in Economics 2017,2, Bundeswehr University Munich, Economic Research Group.
    22. Kharoufeh, Jeffrey P. & Goulias, Konstadinos G., 2002. "Nonparametric identification of daily activity durations using kernel density estimators," Transportation Research Part B: Methodological, Elsevier, vol. 36(1), pages 59-82, January.

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