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The Role of Labor Unions in Immigrant Integration

Author

Listed:
  • Dodini, Samuel

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Willén, Alexander

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Zhu, Julia Li

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

We examine if unions narrow or widen labor market gaps between natives and immigrants. We do so by combining rich Norwegian employer-employee matched register data with exogenous variation in union membership obtained through national government policies that differentially shifted the cost to workers to join a union. While union membership significantly improves the wages of natives, its positive effects diminish substantially for Western immigrants and disappear almost entirely for non-Western immigrants. The effect of unions on native wages, and the role of unions in augmenting the native-immigrant wage gap, is nonexistent in competitive labor markets while it is substantial in markets characterized by a high degree of labor concentration. This implies that unions act as a countervailing force to employer power in imperfect markets and can ameliorate the negative labor market effects of labor market concentration, but only for natives. Using unions as a means to empower workers and solve market failures caused by imperfect competition in the labor market, therefore, is likely to lead to a significant increase in societal inequality.

Suggested Citation

  • Dodini, Samuel & Willén, Alexander & Zhu, Julia Li, 2023. "The Role of Labor Unions in Immigrant Integration," Discussion Paper Series in Economics 24/2023, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2023_024
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    References listed on IDEAS

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    More about this item

    Keywords

    Unions; Migration; Inequality;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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