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Union Wage Effects: Does Membership Matter?

Author

Listed:
  • Barth, E.
  • Raaum, O.
  • Naylor, R.

Abstract

We exploit rare information on the union status of both individual employees and of their workplaces to address two related issues. First, we find a positive effect of workplace trade union density on the level of the individual's pay. Second, we find that the individual's unions membership status loses its significance when we control for establishment-level density. The union wage effect is therefore a pure public good, with individual membership conveying a positive wage externality.

Suggested Citation

  • Barth, E. & Raaum, O. & Naylor, R., 1998. "Union Wage Effects: Does Membership Matter?," The Warwick Economics Research Paper Series (TWERPS) 500, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:500
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/1995-1998/twerp500.pdf
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    Cited by:

    1. Arne Mastekaasa, 2013. "Unionization and Certified Sickness Absence: Norwegian Evidence," ILR Review, Cornell University, ILR School, vol. 66(1), pages 117-141, January.
    2. Adrian Chadi & Laszlo Goerke, 2023. "Seeking shelter in times of crisis? unemployment, perceived job insecurity and trade union membership," Economica, London School of Economics and Political Science, vol. 90(359), pages 1041-1088, July.
    3. Alison L. Booth & Mark L. Bryan, 2004. "The Union Membership Wage-Premium Puzzle: Is There a Free Rider Problem?," ILR Review, Cornell University, ILR School, vol. 57(3), pages 402-421, April.
    4. Andrews, Martyn J. & Stewart, Mark B. & Swaffield, Joanna K. & Upward, Richard, 1998. "The estimation of union wage differentials and the impact of methodological choices," Labour Economics, Elsevier, vol. 5(4), pages 449-474, December.
    5. David Peetz, 2001. "Individual Contracts, Collective Bargaining, Wages and Power," CEPR Discussion Papers 437, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    6. Bryson, Alex & Dale-Olsen, Harald & Nergaard, Kristine, 2016. "Gender Differences in the Union Wage Premium? A Comparative Case Study," IZA Discussion Papers 10435, Institute of Labor Economics (IZA).
    7. Samuel Dodini & Kjell Salvanes & Alexander L.P. Willén & Kjell G. Salvanes, 2021. "The Dynamics of Power in Labor Markets: Monopolistic Unions versus Monopsonistic Employers," CESifo Working Paper Series 9495, CESifo.
    8. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    9. Laszlo Goerke & Markus Pannenberg, 2012. "Risk Aversion and Trade‐Union Membership," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(2), pages 275-295, June.
    10. Balsvik, Ragnhild & Sæthre, Morten, 2014. "Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited," Discussion Paper Series in Economics 30/2014, Norwegian School of Economics, Department of Economics.
    11. Manquilef-Bächler, Alejandra A. & Arulampalam, Wiji & Smith, Jennifer C., 2009. "Differences in Decline: Quantile Regression Analysis of Union Wage Differentials in the United Kingdom, 1991-2003," IZA Discussion Papers 4138, Institute of Labor Economics (IZA).
    12. Elin Svarstad & Ragnar Nymoen, 2023. "Wage inequality and union membership at the establishment level: An econometric study using Norwegian data," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 371-392.
    13. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2017. "Union Density, Productivity, and Wages," DoQSS Working Papers 17-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    14. Silliman, Mikko & Willén, Alexander, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," IZA Discussion Papers 17208, Institute of Labor Economics (IZA).
    15. Askildsen, Jan Erik & Nilsen, Oivind Anti, 2002. "Union membership and wage formation," European Journal of Political Economy, Elsevier, vol. 18(2), pages 345-363, June.
    16. Bastos, Paulo & Kreickemeier, Udo & Wright, Peter, 2009. "Oligopoly, open shop unions and trade liberalisation," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 679-686, November.
    17. Erling Barth & Harald Dale-Olsen, 2011. "Employer Size or Skill Group Size Effect on Wages?," ILR Review, Cornell University, ILR School, vol. 64(2), pages 341-355, January.
    18. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics.
    19. Erling Barth & Bernt Bratsberg & Torbjørn Hægeland & Oddbjørn Raaum, 2008. "Performance Pay and Within-Firm Wage Inequality," Discussion Papers 535, Statistics Norway, Research Department.
    20. Paulo Bastos & Udo Kreickemeier & Peter W. Wright, 2010. "Open‐shop unions and product market competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(2), pages 640-662, May.
    21. Wouter Zwysen & Jan Drahokoupil, 2024. "Collective bargaining and power: Wage premium of collective agreements in Europe 2002–2018," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 335-357, June.
    22. Sebastian Braun, 2009. "Should trade unions welcome foreign investors? First evidence from Danish matched employer-employee data," Economics Bulletin, AccessEcon, vol. 29(2), pages 1175-1181.

    More about this item

    Keywords

    LABOUR UNIONS ; WAGES;

    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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