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Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys

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  • Kulkarni, Abhir

    (Georgia State University)

  • Hirsch, Barry

    (Georgia State University)

Abstract

Estimates of union wage effects have been challenged due to concerns over unobserved worker heterogeneity and endogenous job changes. Many believe that union wage premiums lead to business failures and other forms of worker displacement. In this paper, displacement rates and union wage gaps are examined using the 1994-2018 biennial Displaced Worker Survey (DWS) supplements to the monthly Current Population Surveys. For more than two decades, displacement rates among union and nonunion workers have been remarkably similar. We observe changes in earnings resulting from transitions between union and nonunion jobs following exogenous job changes. Consistent with prior evidence from the 1994 and 1996 DWS, we obtain longitudinal estimates of average union wage effects close to 15 percent, similar to standard cross-section estimates and suggestive of minimal ability bias. Wage losses moving from union to nonunion jobs exceed gains from nonunion to union transitions.

Suggested Citation

  • Kulkarni, Abhir & Hirsch, Barry, 2019. "Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys," IZA Discussion Papers 12786, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12786
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    Cited by:

    1. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.

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    More about this item

    Keywords

    union wage gaps; job loss; displaced workers;
    All these keywords.

    JEL classification:

    • 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
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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