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Union effects on nonunion wages: Evidence from panel data on industries and cities


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  • David Neumark
  • Michael L. Wachter


The authors test for threat and crowding effects of unions on non-union wages at the industry and city levels, using panel data on the percent organized and nonunion industry and city wage differentials constructed from Current Population Surveys over the period 1973-89. At the industry level, increases in the percent organized were associated with decreases in the nonunion industry wage differential, suggesting that crowding effects were the predominant union effect on nonunion industry wage differentials. In contrast, at the city level increases in the percent organized were associated with increases in the nonunion city wage differential, suggesting that threat effects predominated. The authors also find evidence of negative cross-occupation union effects on nonunion industry wage differentials, supporting their hypothesis that the industry-level results were partly driven by complementarity between union and nonunion labor. (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): 49 (1995)
Issue (Month): 1 (October)
Pages: 20-38

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Handle: RePEc:ilr:articl:v:49:y:1995:i:1:p:20-38

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Cited by:
  1. Salvatori, Andrea, 2012. "Union threat and non-union employment: A natural experiment on the use of temporary employment in British firms," Labour Economics, Elsevier, Elsevier, vol. 19(6), pages 944-956.
  2. Barry T. Hirsch & Edward J. Schumacher, . "Union Wages, Rents, and Skills in Health Care Labor Markets," Working Papers 9603, East Carolina University, Department of Economics.
  3. Bradley Ewing & Phanindra Wunnava, 2002. "Union-Nonunion Wage Differentials and Macroeconomic Activity," Middlebury College Working Paper Series, Middlebury College, Department of Economics 0231, Middlebury College, Department of Economics.
  4. DiNardo, J. & Hallock, K. & Pischke, J.-S., 1998. "Unions and Managerial Pay," Papers, California Irvine - School of Social Sciences 97-98-18, California Irvine - School of Social Sciences.
  5. Manda , Damiano Kulundu & Bigsten, Arne & Mwabu , Germano, 2001. "Trade Union Membership and Earnings in Kenyan Manufacturing Firms," Working Papers in Economics, University of Gothenburg, Department of Economics 50, University of Gothenburg, Department of Economics.
  6. W. Robert Reed, 2005. "How Right-to-Work Laws Affect Wages," Labor and Demography, EconWPA 0506005, EconWPA.
  7. Todd Easton & Mary King, 2000. "Differences in Wage Levels Among Metropolitan Areas: Less-educated Workers in the United States," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(1), pages 21-27.
  8. Kadiyali, Vrinda & Kosová, Renáta, 2013. "Inter-industry employment spillovers from tourism inflows," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 43(2), pages 272-281.
  9. Ahn, Tom & Arcidiacono, Peter, 2004. "Paying to queue: a theory of locational differences in nonunion wages," Journal of Urban Economics, Elsevier, vol. 55(3), pages 565-579, May.


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