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Closed Shops and Relative Pay: Institutional Arrangements or High Density?

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  • Metcalf, David
  • Stewart, Mark

Abstract

Employees in workplaces with a closed shop get paid more than their counterparts in comparable workplaces without a closed shop. Is this pay differential a consequence of high union density or the institution of the closed ship itself? The authors' results indicate that a post-entry closed shop adds no extra pay differential over and above that achieved by employees in workplaces with high union density but no closed shop. By contrast the preentry closed shop--where the union normally controls the labor supply and has the potential to impose substantial costs on the employer by striking--roughly doubles the premium gained by high density alone. The implications of their results for the likely impact on union wage premia of recent legal changes outlawing the closed shop are discussed. Copyright 1992 by Blackwell Publishing Ltd

Suggested Citation

  • Metcalf, David & Stewart, Mark, 1992. "Closed Shops and Relative Pay: Institutional Arrangements or High Density?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 503-516, November.
    • Handle: RePEc:bla:obuest:v:54:y:1992:i:4:p:503-16
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    Cited by:

    1. N Millward, 1993. "Uses of the Workplace Industrial Relations Surveys by British Labour Economists," CEP Discussion Papers dp0145, Centre for Economic Performance, LSE.
    2. Metcalf, David, 1993. "Transformation of British industrial relations? Institutions, conduct and outcomes 1980-1990," LSE Research Online Documents on Economics 20981, London School of Economics and Political Science, LSE Library.
    3. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2020. "Do Public Subsidies of Union Membership Increase Union Membership Rates?," DoQSS Working Papers 20-14, Quantitative Social Science - UCL Social Research Institute, University College London.
    4. Blanchflower, D-G, 1997. "Changes Over Time in Union Relative Wage Effects in Great Britain and the United States," Papers 15, Centre for Economic Performance & Institute of Economics.
    5. John H. Pencavel, 2004. "The Surprising Retreat of Union Britain," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 181-232, National Bureau of Economic Research, Inc.
    6. Millward, N., 1993. "Uses of the workplace industrial relations surveys by British labour economists," LSE Research Online Documents on Economics 20964, London School of Economics and Political Science, LSE Library.
    7. L. Booth, Alison & Böheim, René, 2001. "The impact of bargaining institutions on employer-provided training in Britain," ISER Working Paper Series 2001-08, Institute for Social and Economic Research.
    8. Ray Richardson, 1996. "Coercion and the Trade Unions: a Reconsideration of Hayek," British Journal of Industrial Relations, London School of Economics, vol. 34(2), pages 219-236, June.
    9. David Metcalf, 1993. "Industrial Relations and Economic Performance," British Journal of Industrial Relations, London School of Economics, vol. 31(2), pages 255-283, June.
    10. David Metcalf, 1993. "Transformation of British Industrial Relations? Institutions, Conduct and Outcomes 1980-1990," CEP Discussion Papers dp0151, Centre for Economic Performance, LSE.

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