IDEAS home Printed from https://ideas.repec.org/p/ukc/ukcedp/9805.html
   My bibliography  Save this paper

The Impact of Unions on Wages in Brazilian Manufacturing

Author

Listed:
  • Jorge Saba Arbache

Abstract

The empirical literature on the impact of unions on wages has stressed two major conclusions. Firstly, unionised workers earn a wage premium when compared to comparable nonunionised workers. Secondly, the dispersion of wages within the union sector is lower than in the nonunion sector. We examine the validity of these findings in the context of a developing country labour market. Our results show that unionism does create a positive wage differential for male, semi-skilled workers with formal labour contracts in Brazilian manufacturing, and that, contrary to the common finding in the existing literature, wage dispersion is greater in the union sector. We show that these findings can be explained by the greater variance in the characteristics of unionised workers, the vulnerability of nonunionised workers to market conditions, and the structure of wage bargaining.

Suggested Citation

  • Jorge Saba Arbache, 1998. "The Impact of Unions on Wages in Brazilian Manufacturing," Studies in Economics 9805, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:9805
    as

    Download full text from publisher

    File URL: https://www.kent.ac.uk/economics/repec/9805.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John P. Haisken-DeNew & Christoph M. Schmidt, 2000. "Interindustry and Interregion Differentials: Mechanics and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 516-521, August.
    2. Nicole M. Fortin & Thomas Lemieux, 1997. "Institutional Changes and Rising Wage Inequality: Is There a Linkage?," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 75-96, Spring.
    3. Barry T. Hirsch, 1982. "The Interindustry Structure of Unionism, Earnings, and Earnings Dispersion," ILR Review, Cornell University, ILR School, vol. 36(1), pages 22-39, October.
    4. Jorge Saba Arbache, 1997. "Wage Differentials in Brazilian Manufacturing," Studies in Economics 9705, School of Economics, University of Kent.
    5. Booth, Alison L, 1984. "A Public Choice Model of Trade Union Behaviour and Membership," Economic Journal, Royal Economic Society, vol. 94(376), pages 883-898, December.
    6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    7. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398, January.
    8. Mark Thomas & Luc Vallée, 1996. "Labour market segmentation in Cameroonian manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 32(6), pages 876-898.
    9. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
    10. Stewart, Mark B, 1990. "Union Wage Differentials, Product Market Influences and the Division of Rents," Economic Journal, Royal Economic Society, vol. 100(403), pages 1122-1137, December.
    11. Rowthorn, R E, 1992. "Centralisation, Employment and Wage Dispersion," Economic Journal, Royal Economic Society, vol. 102(412), pages 506-523, May.
    12. Teal, Francis, 1996. "The Size and sources of economic rents in a developing country manufacturing labour market," Economic Journal, Royal Economic Society, vol. 106(437), pages 963-976, July.
    13. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    14. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-942, October.
    15. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
    16. Kahn, Lawrence M & Curme, Michael, 1987. "Unions and Nonunion Wage Dispersion," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 600-607, November.
    17. Edward J. Amadeo, 1994. "Institutions, Inflation and Unemployment," Books, Edward Elgar Publishing, number 10.
    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. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).

    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. Arbache, Jorge Saba & Carneiro, Francisco Galrao, 1999. "Unions and Interindustry Wage Differentials," World Development, Elsevier, vol. 27(10), pages 1875-1883, October.
    2. Robert Plasman & François Rycx & Ilan Tojerow, 2006. "Industry wage differentials, unobserved ability, and rent-sharing: evidence from matched employer-employee, 1992-2005," DULBEA Working Papers 06-14.RS, ULB -- Universite Libre de Bruxelles.
    3. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
    4. repec:eee:labchp:v:2:y:1986:i:c:p:1039-1089 is not listed on IDEAS
    5. Gonzaga, Gustavo & Scandiuzzi, João Carlos, 1998. "How Does Government Wage Policy Affect Wage Bargaining in Brazil?," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 18(1), May.
    6. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2022. "Turning Non-members into Members: Do Public Subsidies to Union Membership Matter?," DoQSS Working Papers 22-05, Quantitative Social Science - UCL Social Research Institute, University College London.
    7. Aidt, T.S. & Tzannatos, Z., 2005. "The Cost and Benefits of Collective Bargaining," Cambridge Working Papers in Economics 0541, Faculty of Economics, University of Cambridge.
    8. Justus Haucap & Christian Wey, 2004. "Unionisation structures and innovation incentives," Economic Journal, Royal Economic Society, vol. 114(494), pages 149-165, March.
    9. David Fairris, 2007. "¿Qué hacen los sindicatos en México?," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 22(2), pages 185-240.
    10. Gene M. Grossman, 1984. "International Competition and the Unionized Sector," Canadian Journal of Economics, Canadian Economics Association, vol. 17(3), pages 541-556, August.
    11. Frank Scharr, 2005. "Tarifbindung, Rententeilung und Konzessionsverträge als Einflussgrößen der Lohnhöhe in Unternehmen : eine Untersuchung mit Mikrodaten für thüringische Firmen," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 39, May.
    12. Açıkgöz, Ömer Tuğrul & Kaymak, Barış, 2014. "The rising skill premium and deunionization," Journal of Monetary Economics, Elsevier, vol. 63(C), pages 37-50.
    13. repec:pru:wpaper:27 is not listed on IDEAS
    14. Henry S. Farber, 2001. "Notes on the Economics of Labor Unions," Working Papers 2001-5, Princeton University. Economics Department..
    15. Jorge Saba Arbache, 1999. "Trade Liberalisation and Insider Power: The Case of Brazil," Studies in Economics 9902, School of Economics, University of Kent.
    16. Alison Booth, 2012. "The Economic Behavior of Trade Unions," CEPR Discussion Papers 670, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    17. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
    18. John Pencavel, 2009. "How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being," ILR Review, Cornell University, ILR School, vol. 62(2), pages 147-156, January.
    19. Fernando Rios-Avila & Barry T. Hirsch, 2014. "Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 1-27, January.
    20. Barth, Erling & Bryson, Alex & Dale-Olsen, Harald, 2025. "Turning non-members into members: Do public subsidies to union membership matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    21. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    22. Grossman, Gene M, 1983. "Union Wages, Temporary Layoffs, and Seniority," American Economic Review, American Economic Association, vol. 73(3), pages 277-290, June.

    More about this item

    Keywords

    Union power; union wage differential; wage dispersion; Brazil;
    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

    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:ukc:ukcedp:9805. 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: Dr Anirban Mitra (email available below). General contact details of provider: https://www.kent.ac.uk/economics/ .

    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.