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Does Measurement Error Bias Fixed‐effects Estimates of the Union Wage Effect?

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  • Joanna K. Swaffield

Abstract

This paper compares estimates of the union wage effect using cross‐section and panel estimators for male manual full‐time and female employees using data from the British Household Panel Survey, 1991‐1997. A comparison of cross‐section and panel estimates suggests that unobserved heterogeneity biases cross‐section estimates upwards. However, it is also found that the divergence between estimates is overstated because measurement error biases the fixed‐effects estimates downward. Reducing measurement error in the union variable by taking averages and restricting changes in union status to occur only when a change in employer and/or job takes place increases fixed‐effects estimates of the union wage effect.

Suggested Citation

  • Joanna K. Swaffield, 2001. "Does Measurement Error Bias Fixed‐effects Estimates of the Union Wage Effect?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 437-457, September.
    • Handle: RePEc:bla:obuest:v:63:y:2001:i:4:p:437-457
    DOI: 10.1111/1468-0084.00228
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    1. repec:lan:wpaper:2914 is not listed on IDEAS
    2. Koevoets, Wim, 2007. "Union wage premiums in Great Britain: Coverage or membership?," Labour Economics, Elsevier, vol. 14(1), pages 53-71, January.
    3. Lixin Cai & C. Jeffrey Waddoups, 2011. "Union Wage Effects in Australia: Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages 279-305, July.
    4. David K. Guilkey & Veronica Escamilla & Lisa M. Calhoun & Ilene S. Speizer, 2020. "The Examination of Diffusion Effects on Modern Contraceptive Use in Nigeria," Demography, Springer;Population Association of America (PAA), vol. 57(3), pages 873-898, June.
    5. José-Ignacio Antón & Francisco-Javier Braña & Rafael Muñoz de Bustillo, 2016. "An analysis of the cost of disability across Europe using the standard of living approach," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(3), pages 281-306, August.
    6. Cristia, Julian P. & Czerwonko, Alejo & Garofalo, Pablo, 2010. "Does ICT Increase Years of Education?: Evidence from Peru," IDB Publications (Working Papers) 3010, Inter-American Development Bank.
    7. José-Ignacio Antón & René Böheim & Rudolf Winter-Ebmer, 2022. "The effect of migration on unionization in Austria," Empirical Economics, Springer, vol. 63(5), pages 2693-2720, November.
    8. C. Jeffrey Waddoups, 2014. "Union Membership and Job-Related Training: Incidence, Transferability, and Efficacy," British Journal of Industrial Relations, London School of Economics, vol. 52(4), pages 753-778, December.
    9. Georgios Marios Chrysanthou, 2007. "Determinants of Trade Union Membership in Great Britain During 1991-2003," Discussion Papers 07/01, Department of Economics, University of York.
    10. Mehrzad B. Baktash & Uwe Jirjahn, 2023. "Are Managers More Machiavellian Than Other Employees?," Research Papers in Economics 2023-07, University of Trier, 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. Héctor Gutiérrez Rufrancos, 2019. "Are There Gains to Joining a Union? Evidence from Mexico," British Journal of Industrial Relations, London School of Economics, vol. 57(3), pages 676-712, September.
    13. C Green & J S Heywood, 2010. "Unions, Dissatisfied Workers and Sorting," Working Papers 615292, Lancaster University Management School, Economics Department.
    14. Uwe Jirjahn & Martha Ottenbacher, 2023. "Big Five personality traits and sex," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 549-580, April.
    15. Blanden, Jo & Buscha, Franz & Sturgis, Patrick & Urwin, Peter, 2012. "Measuring the earnings returns to lifelong learning in the UK," Economics of Education Review, Elsevier, vol. 31(4), pages 501-514.
    16. repec:lan:wpaper:2912 is not listed on IDEAS
    17. repec:lan:wpaper:3161 is not listed on IDEAS

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