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Wage determination in the union and non-union sectors: A sample selectivity approach


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  • Gregory M. Duncan
  • Duane E. Leigh


This paper re-examines the question, recently raised in this journal by Bloch and Kuskin, of whether wages are determined differently in the union and nonunion sectors. Whereas Bloch and Kuskin employed ordinary least squares to estimate separate wage equations for the two sectors, this study uses a methodology proposed by Heckman and by Lee to correct for the possibility that wage differences may determine the union status of workers as well as vice versa. The authors find that union status is strongly related to the predicted union-nonunion wage differential, but their evidence nevertheless reinforces Bloch and Kuskin's empirical finding that the union earnings function is less sensitive than the nonunion earnings function to changes in nearly every observable attribute of workers, such as education and experience. The authors also conclude that previous studies using separately estimated union and nonunion wage equations may have understated the success of unions in raising the relative wages of their members. (Abstract courtesy JSTOR.)

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 34 (1980)
Issue (Month): 1 (October)
Pages: 24-34

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Handle: RePEc:ilr:articl:v:34:y:1980:i:1:p:24-34

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Cited by:
  1. Corneo, Giacomo & Lucifora, Claudio, 1997. "Wage formation under union threat effects: Theory and empirical evidence," Labour Economics, Elsevier, Elsevier, vol. 4(3), pages 265-292, September.
  2. Luis Armando Galvis, 2010. "Diferencias salariales por género y región en Colombia: una aproximación con regresión por cuantiles," DOCUMENTOS DE TRABAJO SOBRE ECONOMÍA REGIONAL, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL 007428, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL.
  3. Burak Günalp & Seyit Mümin Cilasun & Elif Öznur Acar, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," Working Papers, Turkish Economic Association 2013/15, Turkish Economic Association.
  4. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, Elsevier, Elsevier.
  5. Salma Ahmed & Pushkar Maitra, 2011. "A Distributional Analysis of the Gender Wage Gap in Bangladesh," Development Research Unit Working Paper Series, Monash University, Department of Economics 20-11, Monash University, Department of Economics.
  6. Shoshana Neuman & Ronald Oaxaca, 2004. "Wage Decompositions with Selectivity-Corrected Wage Equations: A Methodological Note," Journal of Economic Inequality, Springer, Springer, vol. 2(1), pages 3-10, April.


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