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Estimating union wage effects and the probability of union membership in the U.K. during 1991-2003

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  • Chrysanthou, Georgios Marios

Abstract

Using a dynamic model of unionism and wage determination we find that the unobserved factors that influence union membership also affect wages. We observe a significant decline in trade union membership persistence during the period under analysis. We find that UK trade unions still play a nonnegligible, albeit diminishing, role in wage formation. While unions were unable to establish a wage premium for male members during the two periods considered, the female union wage effect stood at (19.4%, 17.6%) during (1991-1996, 1997-2002) respectively. The endogeneity correction procedure employed yields a discernible pattern of the union wage effect relative to OLS and fixed effects thus, refuting the pessimistic conclusions reached by Freeman and Medoff (1982) and Lewis (1986) that endogeneity correction methodologies do not contribute to our understanding of the union wage effect puzzle

Suggested Citation

  • Chrysanthou, Georgios Marios, 2010. "Estimating union wage effects and the probability of union membership in the U.K. during 1991-2003," UC3M Working papers. Economics we1014, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we1014
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    Keywords

    Union membership persistence;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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