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Unions, Firm Size and Wages

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  • PAUL MILLER
  • PAUL MILLER
  • CHARLES MULVEY

Abstract

It is well established in the literature that Australian unions raise their members' wages relative to those of otherwise comparable non‐members by some amount in the range 7–15 per cent. However, it is also known that firm size is positively associated with union density and that firm size is positively associated with relative wages independent of unionism. Using a new, large and rich set of data from the Training and Education Survey 1993 we show that the estimated union relative wage effect is largely comprised of bias due to the omission of firm size as a variable in the wage equations usually estimated.

Suggested Citation

  • Paul Miller & Paul Miller & Charles Mulvey, 1996. "Unions, Firm Size and Wages," The Economic Record, The Economic Society of Australia, vol. 72(217), pages 138-151, June.
    • Handle: RePEc:bla:ecorec:v:72:y:1996:i:217:p:138-151
    DOI: 10.1111/j.1475-4932.1996.tb00948.x
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    References listed on IDEAS

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    1. Dunn, L F, 1986. "Work Disutility and Compensating Differentials: Estimation of Factors in the Link between Wages and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 67-73, February.
    2. Duncan, Greg J & Stafford, Frank P, 1980. "Do Union Members Receive Compensating Wage Differentials?," American Economic Review, American Economic Association, vol. 70(3), pages 355-371, June.
    3. Paul Miller & Charles Mulvey, 1992. "Trade Unions, Collective Voice and Fringe Benefits," The Economic Record, The Economic Society of Australia, vol. 68(2), pages 125-141, June.
    4. Stewart, Mark B, 1995. "Union Wage Differentials in an Era of Declining Unionization," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(2), pages 143-166, May.
    5. Virginia Christie, 1992. "Union Wage Effects and the Probability of Union Membership," The Economic Record, The Economic Society of Australia, vol. 68(1), pages 43-56, March.
    6. P.W. Miller & S. Rummery, 1989. "Unionism and the Structure of Male Wages in the Youth Labour Market," Economics Discussion / Working Papers 89-08, The University of Western Australia, Department of Economics.
    7. Christie, Virginia, 1992. "Union Wage Effects and the Probability of Union Membership," The Economic Record, The Economic Society of Australia, vol. 68(200), pages 43-56, March.
    8. S. Rosen, 1969. "Trade Union Power, Threat Effects and the Extent of Organization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(2), pages 185-196.
    9. Miller, Paul & Mulvey, Charles, 1992. "Trade Unions, Collective Voice and Fringe Benefits," The Economic Record, The Economic Society of Australia, vol. 68(201), pages 125-141, June.
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    Cited by:

    1. Mark Wooden, 2001. "Union Wage Effects in the Presence of Enterprise Bargaining," The Economic Record, The Economic Society of Australia, vol. 77(236), pages 1-18, March.
    2. Lixin Cai & C. Jeffrey Waddoups, 2009. "The Role of Unobserved Heterogeneity and On-the-Job Training in the Employer Size-Wage Effect: Evidence from Australia," Working Papers 0915, University of Nevada, Las Vegas , Department of Economics.
    3. Lixin Cai & Amy Y.C. Liu, 2008. "Public-Private Wage Gap in Australia: Variation Along the Distribution," CEPR Discussion Papers 581, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    4. Jeff Borland & Joe Hirschberg & Jenny Lye, 1998. "Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 36-53, March.
    5. Steven B. Caudill & Charles O. Kroncke & Franklin G. Mixon, 2021. "Is there a firm size‐wage gap after economic transition? – An examination of for‐profit and not‐for‐profit firms in Estonia," LABOUR, CEIS, vol. 35(4), pages 435-449, December.
    6. C. Waddoups, 2011. "Firm Size and Work-Related Training: New Evidence on Incidence, Intensity, and Training Type from Australia," Journal of Labor Research, Springer, vol. 32(4), pages 390-413, December.
    7. Heiko Haase & Arndt Lautenschl?ger, 2011. "Career Choice Motivations of University Students," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 2(1), pages 2-13, February.
    8. Elizabeth Webster & Yi‐Ping Tseng, 2002. "The Determinants of Relative Wage Change in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 70-84, March.
    9. Siminski, Peter, 2008. "What Would the Average Public Sector Employee be Paid in the Private Sector?," Economics Working Papers wp08-05, School of Economics, University of Wollongong, NSW, Australia.
    10. Clive Belfield & Xiangdong Wei, 2004. "Employer size-wage effects: evidence from matched employer-employee survey data in the UK," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 185-193.
    11. Peter Siminski, 2013. "Are low-skill public sector workers really overpaid? A quasi-differenced panel data analysis," Applied Economics, Taylor & Francis Journals, vol. 45(14), pages 1915-1929, May.
    12. Xinxin Ma & Ichiro Iwasaki, 2021. "Does communist party membership bring a wage premium in China? a meta-analysis," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 19(1), pages 55-94, January.

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