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What Explains Wage Differences Between Union Members and Covered Nonmembers?

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  • Edward J. Schumacher
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    Abstract

    An individual covered by a collective bargaining agreement but who is not a union member is estimated to earn about 13% lower wages than a union member. Sectors with relatively few covered nonmembers are associated with a large coverage differential, while sectors with high proportions of covered nonmembers are associated with small differentials. This suggests freeriders either weaken the bargaining position of the union or weak bargaining positions increase the incentive to freeride. Only a modest amount of this differential is accounted for by unmeasured ability, the probationary period associated with newly hired union workers, or union status misclassification.

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    Bibliographic Info

    Article provided by Southern Economic Association in its journal Southern Economic Journal.

    Volume (Year): 65 (1999)
    Issue (Month): 3 (January)
    Pages: 493-512

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    Handle: RePEc:sej:ancoec:v:65:3:y:1999:p:493-512

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    Web page: http://www.southerneconomic.org/
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    Cited by:
    1. Bernd Fitzenberger & Karsten Kohn & Alexander C. Lembcke, 2008. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," CEP Discussion Papers dp0859, Centre for Economic Performance, LSE.
    2. David G. Blanchflower & Alex Bryson, 2004. "The union wage premium in the US and the UK," LSE Research Online Documents on Economics 19987, London School of Economics and Political Science, LSE Library.
    3. Laszlo Goerke & Markus Pannenberg, 2012. "Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform," CESifo Working Paper Series 3909, CESifo Group Munich.
    4. Alex Bryson, 2006. "Union Free-Riding in Britain and New Zealand," CEP Discussion Papers dp0713, Centre for Economic Performance, LSE.
    5. Dr Alex Bryson & John Forth, 2009. "Unions and Workplace Performance in Britain and France," NIESR Discussion Papers 2189, National Institute of Economic and Social Research.
    6. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," IZA Discussion Papers 7474, Institute for the Study of Labor (IZA).
    7. McGuinness, Seamus & Kelly, Elish & O'Connell, Philip J., 2008. "The Impact of Wage Bargaining Regime on Firm-Level Competitiveness and Wage Inequality: The Case of Ireland," Papers WP266, Economic and Social Research Institute (ESRI).
    8. Goerke, Laszlo & Pannenberg, Markus, 2010. "Trade Union Membership and Dismissals," IZA Discussion Papers 5222, Institute for the Study of Labor (IZA).
    9. Koevoets, Wim, 2007. "Union wage premiums in Great Britain: Coverage or membership?," Labour Economics, Elsevier, vol. 14(1), pages 53-71, January.

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