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Estimation and Testing of the Union Wage Effect Using Panel Data

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Author Info
Jakubson, George
Abstract

The author presents estimates of the union wage effect controlling for unmeasured individual effects, and subjects the conventional fixed-effects model to specification tests. For Panel Study of Income Dynamics men, the union wage effect is 5-8 percent after controlling for person effects, as opposed to 20 percent in cross-section. Omnibus tests based on an unrestricted reduced form and instrumental variables tests based on differencing are consistent with conventional models. Tests based on comparing those who enter and leave union coverage provide evidence against the usual model. The author finds evidence for interactions between union status and other variables even after controlling for person effects. Copyright 1991 by The Review of Economic Studies Limited.

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Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 58 (1991)
Issue (Month): 5 (October)
Pages: 971-91
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Handle: RePEc:bla:restud:v:58:y:1991:i:5:p:971-91

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  7. Edward J. Schumacher, . "What Explains Union Membership Contract Coverage Wage Differentials?," Working Papers 9719, East Carolina University, Department of Economics. [Downloadable!]
  8. Steven Raphael, 1997. "Estimating the Union Earnings Effect Using a Sample of Displaced Workers," University of California at San Diego, Economics Working Paper Series 97-09, Department of Economics, UC San Diego. [Downloadable!]
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  12. Changhui Kang, 2003. "Union Wage Effect: New Evidence From Matched Employer-Employee Data," Departmental Working Papers wp0302, National University of Singapore, Department of Economics. [Downloadable!]
  13. Edward J. Schumacher & Barry T. Hirsch, . "Compensating Differentials and Unmeasured Ability in the Labor Market For Nurses: Why Do Hospitals Pay More?," Working Papers 9604, East Carolina University, Department of Economics. [Downloadable!]
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