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Returns to seniority in union and nonunion jobs: A new look at the evidence

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  • Katharine G. Abraham
  • Henry S. Farber

Abstract

In cross-sectional data, the positive association between seniority and earnings is typically much stronger for nonunion workers than for union workers, a finding that seems inconsistent with the generalization that seniority is more important in the union sector than in the nonunion sector. The authors of this paper show that standard estimates of the return to seniority are likely to be biased upward due to unmeasured worker heterogeneity, job heterogeneity, or both, and they argue that this bias is likely to be larger in the nonunion sector than in the union sector. When they correct for this problem in analyzing data on male blue-collar workers for the years 1968-80, they find a larger return to seniority in the union sector than in the nonunion sector. (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): 42 (1988)
Issue (Month): 1 (October)
Pages: 3-19

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Handle: RePEc:ilr:articl:v:42:y:1988:i:1:p:3-19

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References

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  1. Richard B. Freeman, 1980. "Unionism and the dispersion of wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
  2. Richard B. Freeman, 1982. "Union wage practices and wage dispersion within establishments," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 3-21, October.
  3. Robert E. Hall, 1984. "The Importance of Lifetime Jobs in the U.S. Economy," NBER Working Papers 0560, National Bureau of Economic Research, Inc.
  4. E.K. Berndt & B.H. Hall & R.E. Hall, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 103-116 National Bureau of Economic Research, Inc.
  5. Farrell Bloch & Mark S. Kuskin, 1978. "Wage determination in the union and nonunion sectors," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 31(2), pages 183-192, January.
  6. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
  7. Joseph G. Altonji & Robert A. Shakotko, 1985. "Do Wages Rise With Job Seniority?," NBER Working Papers 1616, National Bureau of Economic Research, Inc.
  8. Thomas Hyclak, 1979. "The effect of unions on earnings inequality in local labor markets," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 33(1), pages 77-84, October.
  9. George J. Borjas, 1979. "Job Satisfaction, Wages, and Unions," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 21-40.
  10. Katharine G. Abraham & James L. Medoff, 1985. "Length of service and promotions in union and nonunion work groups," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(3), pages 408-420, April.
  11. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  12. Blair, Douglas H & Crawford, David L, 1984. "Labor Union Objectives and Collective Bargaining," The Quarterly Journal of Economics, MIT Press, vol. 99(3), pages 547-66, August.
  13. Barry T. Hirsch, 1982. "The interindustry structure of unionism, earnings, and earnings dispersion," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 22-39, October.
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Citations

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Cited by:
  1. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
  2. Reich, Michael, 2012. "The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okun’s Law," Institute for Research on Labor and Employment, Working Paper Series qt8sc8s1z1, Institute of Industrial Relations, UC Berkeley.
  3. Hart, Robert A & Ma, Yue, 2013. "Overtime Working and Contract Efficiency," Stirling Economics Discussion Papers 2013-07, University of Stirling, Division of Economics.
  4. repec:hal:journl:halshs-00202293 is not listed on IDEAS
  5. repec:cdl:indrel:qt35g487jh is not listed on IDEAS
  6. Anabela Carneiro & Pedro Portugal, 2006. "Earnings Losses of Displaced Workers: Evidence from a Matched Employer-Employee Data Set," Working Papers w200614, Banco de Portugal, Economics and Research Department.
  7. Byron W. Brown & Stephen A. Woodbury, 1995. "Seniority, External Labor Markets, and Faculty Pay," Upjohn Working Papers and Journal Articles 95-37, W.E. Upjohn Institute for Employment Research.
  8. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer, vol. 18(4), pages 436-460, August.
  9. Nicolas Williams, 2004. "Seniority, Experience, and Wages in the UK," University of Cincinnati, Economics Working Papers Series 2004-06, University of Cincinnati, Department of Economics.
  10. Don Mar & Paul Ong, 1994. "Race and rehiring in the high-tech industry," The Review of Black Political Economy, Springer, vol. 22(3), pages 43-54, March.
  11. Devereux, Paul J. & Hart, Robert A. & Roberts, J. Elizabeth, 2013. "Job Spells, Employer Spells, and Wage Returns to Tenure," IZA Discussion Papers 7384, Institute for the Study of Labor (IZA).
  12. Givord, Pauline & Maurin, Eric, 2003. "Job Tenure, Wages and Technology: A Reassessment Using Matched Worker-Firm Panel Data," CEPR Discussion Papers 4147, C.E.P.R. Discussion Papers.
  13. Lorenz, Wilhelm & Wagner, Joachim, 1989. "Tätigkeit im erlernten Beruf, Betriebszugehörigkeitsdauer und Arbeitseinkommen : eine ökonometrische Untersuchung mit Individualdaten für das Bundesland Bremen und ein metallverarbeitendes Unterne," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 22(4), pages 568-575.

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