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The Union Wage Premium in the US and the UK

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Author Info
David Blanchflower
Alex Bryson

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Abstract

This paper presents evidence of both counter-cyclical and secular decline in the union membership wage premiu m inthe US and the UK over the last couple of decades. The premium has fallen for most groups of workers, the mainexception being public sector workers in the US. By the beginning of the 21st Century the premium remainedsubstantial in the US but there was no premium for many workers in the UK. Industry, state and occupation-levelanalyses for the US identify upward as well as downward movement in the premium characterized by regression tothe mean. Using linked employer-employee data for Britain we show estimates of the membership premium tend tobe upwardly biased where rich employer data are absent and that OLS estimates are higher than those obtained withpropensity score matching.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0612.

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Date of creation: Feb 2004
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Handle: RePEc:cep:cepdps:dp0612

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Related research
Keywords: union membership wage premium.;

Find related papers by JEL classification:
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Booth, Alison L & Bryan, Mark L, 2001. "The Union Membership Wage Premium Puzzle: Is There A Free-Rider Problem?," CEPR Discussion Papers 2879, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Staiger, Robert W, 1988. "Organized Labor and the Scope of International Specialization," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1022-47, October. [Downloadable!] (restricted)
    Other versions:
  3. Alex Bryson, 2004. "Unions And Employment Growth In British Workplaces During The 1990s: A Panel Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(4), pages 477-506, 09. [Downloadable!] (restricted)
  4. Henry Farber, 2003. "Nonunion Wage Rates and the Threat of Unionization," NBER Working Papers 9705, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Stewart, Mark B, 1995. "Union Wage Differentials in an Era of Declining Unionization," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(2), pages 143-66, May.
  6. Blanchflower, David G & Millward, Neil & Oswald, Andrew J, 1991. "Unionism and Employment Behaviour," Economic Journal, Royal Economic Society, vol. 101(407), pages 815-34, July. [Downloadable!] (restricted)
  7. Hirsch, Barry T. & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Budd, John W & Na, In-Gang, 2000. "The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 783-807, October. [Downloadable!] (restricted)
    Other versions:
  9. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    Other versions:
  10. Andrews, Martyn J. & Stewart, Mark B. & Swaffield, Joanna K. & Upward, Richard, 1998. "The estimation of union wage differentials and the impact of methodological choices," Labour Economics, Elsevier, vol. 5(4), pages 449-474, December. [Downloadable!] (restricted)
  11. Bernt Bratsberg & James F. Ragan & Jr, 2002. "Changes in the union wage premium by industry," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(1), pages 65-83, October.
  12. Shah, Anup R, 1984. "Job Attributes and the Size of the Union-Non-union Wage Differential," Economica, London School of Economics and Political Science, vol. 51(204), pages 437-46, November. [Downloadable!] (restricted)
  13. Stewart, Mark B, 1987. "Collective Bargaining Arrangements, Closed Shops and Relative Pay," Economic Journal, Royal Economic Society, vol. 97(385), pages 140-56, March. [Downloadable!] (restricted)
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  14. Forth, John & Millward, Neil, 2002. "Union effects on pay levels in Britain," Labour Economics, Elsevier, vol. 9(4), pages 547-561, September. [Downloadable!] (restricted)
  15. David G. Blanchflower & Alex Bryson, 2003. "What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?," NBER Working Papers 9973, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. David G. Blanchflower, 1997. "Changes Over Time in Union Relative Wage Effects in Great Britain and the United States," NBER Working Papers 6100, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
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  18. David Blanchflower & Alex Bryson, 2002. "Changes over time in union relative wage effects in the UK and the US revisited," NBER Working Papers 9395, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  19. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier. [Downloadable!] (restricted)
  20. Blanchflower, David G & Oswald, Andrew J & Sanfey, Peter, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 227-51, February. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. J. Shackleton, 2007. "Britain’s Labor Market Under the Blair Governments," Journal of Labor Research, Springer, vol. 28(3), pages 454-476, July. [Downloadable!] (restricted)
  2. Donna Brown & Peter Ingram & Jonathan Wadsworth, 2004. "Everyone's A Winner? Union Effects on Persistence in Private Sector Wage Settlements: Longitudinal Evidence from Britain," Department of Economics Discussion Papers 1104, Department of Economics, University of Surrey. [Downloadable!]
  3. H. Boulhol & S. Dobbelaere & S. Maioli, 2007. "Imports as product and labour market discipline," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/479, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
    Other versions:
  4. Barragan, Luis, 2006. "¿Cuánto es el premio al salario por pertenecer a un sindicato en el Ecuador?: Un análisis usando Propensity Score Matching
    [How much it is the prize to the wage to belong to a union in Ecuador?:    ," MPRA Paper 3947, University Library of Munich, Germany. [Downloadable!]
  5. Manquilef-Bächler, Alejandra A. & Arulampalam, Wiji & Smith, Jennifer C., 2009. "Differences in Decline: Quantile Regression Analysis of Union Wage Differentials in the United Kingdom, 1991-2003," IZA Discussion Papers 4138, Institute for the Study of Labor (IZA). [Downloadable!]
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This page was last updated on 2009-11-18.

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