IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2755.html
   My bibliography  Save this paper

Comparisons Between Public and Private Sector Union Wage Differentials: Does the Legal Environment Matter?

Author

Listed:
  • Joseph Tracy

Abstract

A stylized fact in the growing literature on public sector labor markets is that estimates of public sector union wage premia are significantly lower than estimates of private sector union wage premia. In this paper I investigate the hypothesis that this difference may in part be due to the differing legal environments in which public and private sector unions operate. Using data from the Current Population Survey and the Census of Population, I find that public sector union wage differentials increase significantly with the degree of legal protection afforded to the union in bargaining. However, the estimated public sector union wage premia when no legal controls are included in the specification are close to the estimated premia under the strongest legal environment. Consequently, while controlling for the legal environment in the public Sector is important, it may not reconcile the differences between estimated public and private sector union wage premia.

Suggested Citation

  • Joseph Tracy, 1988. "Comparisons Between Public and Private Sector Union Wage Differentials: Does the Legal Environment Matter?," NBER Working Papers 2755, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2755
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2755.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Moore, William J & Newman, Robert J, 1975. "On the Prospects for American Trade Union Growth: A Cross-Section Analysis," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 435-445, November.
    2. Casey Ichniowski, 1988. "Public Sector Union Growth and Bargaining Laws: A Proportional Hazards Approach with Time-Varying Treatments," NBER Chapters, in: When Public Sector Workers Unionize, pages 19-40, National Bureau of Economic Research, Inc.
    3. William M. Landes, 1968. "The Economics of Fair Employment Laws," Journal of Political Economy, University of Chicago Press, vol. 76(4), pages 507-507.
    4. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    5. Robinson, Chris & Tomes, Nigel, 1984. "Union Wage Differentials in the Public and Private Sectors: A Simultaneous Equations Specification," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 106-127, January.
    6. Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260, Elsevier.
    7. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    8. David T. Ellwood & Glenn A. Fine, 1983. "The Impact of Right-to-Work Laws on Union Organizing," NBER Working Papers 1116, National Bureau of Economic Research, Inc.
    9. Amemiya, Takeshi & MaCurdy, Thomas E, 1986. "Instrumental-Variable Estimation of an Error-Components Model," Econometrica, Econometric Society, vol. 54(4), pages 869-880, July.
    10. Henry S. Farber, 1983. "Right-to-Work Laws and the Extent of Unionization," NBER Working Papers 1136, National Bureau of Economic Research, Inc.
    11. Farber, Henry S, 1984. "Right-to-Work Laws and the Extent of Unionization," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 319-352, July.
    12. Lumsden, Keith G & Petersen, Craig H, 1975. "The Effect of Right-to-Work Laws on Unionization in the United States," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1237-1248, December.
    13. Richard B. Freeman & Robert G. Valletta, 1987. "The Effect of Public Sector Labor laws on Collective Bargaining, Wages, and Employment," NBER Working Papers 2284, National Bureau of Economic Research, Inc.
    14. Breusch, Trevor S & Mizon, Grayham E & Schmidt, Peter, 1989. "Efficient Estimation Using Panel Data," Econometrica, Econometric Society, vol. 57(3), pages 695-700, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    2. Holtz-Eakin, Douglas & Rosen, Harvey S, 1991. "Municipal Labor Demand in the Presence of Uncertainty: An Econometric Approach," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 276-293, July.
    3. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    4. Anne Lauringson, 2010. "Measuring Union Bargaining Power In The Estonian Public Sector," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 72, Faculty of Economics and Business Administration, University of Tartu (Estonia).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    2. Béatrice D'HOMBRES & Jean-Louis ARCAND, 2006. "Testing for Separation in Agricultural Household Models and Unobservable Household-Specific Effects," Working Papers 200632, CERDI.
    3. Henry S. Farber, 1987. "The Evolution of Public Sector Bargaining Laws," NBER Working Papers 2361, National Bureau of Economic Research, Inc.
    4. Boumahdi, Rachid & Thomas, Alban, 2006. "Instrument relevance and efficient estimation with panel data," Economics Letters, Elsevier, vol. 93(2), pages 305-310, November.
    5. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    6. Garcia, Serge & Reynaud, Arnaud, 2004. "Estimating the benefits of efficient water pricing in France," Resource and Energy Economics, Elsevier, vol. 26(1), pages 1-25, March.
    7. Dasgupta,Basab & Lall,Somik V. & Lozano Gracia,Nancy, 2014. "Urbanization and housing investment," Policy Research Working Paper Series 115004, The World Bank.
    8. Baltagi, Badi H., 2023. "The two-way Hausman and Taylor estimator," Economics Letters, Elsevier, vol. 228(C).
    9. Nguyen, Justin Hung & Qiu, Buhui, 2022. "Right-to-Work laws and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 76(C).
    10. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, vol. 68(1), pages 5-27, July.
    11. Eduardo Fé, 2012. "Instrumental variable estimation of heteroskedasticity adaptive error component models," Statistical Papers, Springer, vol. 53(3), pages 577-615, August.
    12. Peter Egger, 2008. "On the role of distance for outward FDI," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 375-389, June.
    13. W. Robert Reed, 2003. "How Right-To-Work Laws Affect Wages," Journal of Labor Research, Transaction Publishers, vol. 24(4), pages 713-730, October.
    14. Christopher K. Coombs & Richard Cebula, 2011. "The Impact of Union Corruption on Union Membership," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(1), pages 131-148, January.
    15. Nguyen, Quyen T.K. & Almodóvar, Paloma & Wei, Ziyi, 2022. "Intra-firm and arm’s length export propensity and intensity of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 145(C), pages 288-308.
    16. Eduardo Fé Rodríguez, 2009. "Adaptive Instrumental Variable Estimation of Heteroskedastic Error Component Models," Economics Discussion Paper Series 0921, Economics, The University of Manchester.
    17. Metcalf, Gilbert E., 1996. "Specification testing in panel data with instrumental variables," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 291-307.
    18. Liang Zhao & Joyce P. Jacobsen, 2006. "Revisiting The Bell Curve Debate Regarding the Effects of Cognitive Ability on Wages," Wesleyan Economics Working Papers 2006-026, Wesleyan University, Department of Economics.
    19. Ahn, Seung C. & Lee, Young H. & Schmidt, Peter, 2013. "Panel data models with multiple time-varying individual effects," Journal of Econometrics, Elsevier, vol. 174(1), pages 1-14.
    20. Bruno, Randolph Luca & Magazzini, Laura & Stampini, Marco, 2020. "Exploiting information from singletons in panel data analysis: A GMM approach," Economics Letters, Elsevier, vol. 186(C).
    21. Jaime Saavedra-Chanduví & Máximo Torero, 2002. "Union Density Changes and Union Effects On Firm Performance in Peru," Research Department Publications 3158, Inter-American Development Bank, Research Department.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2755. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.