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Assymetries in Union Relative Wage Effects in Ghanian Manufacturing - An analysis Applying Quantile Regressions

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  • Blunch, Niels-Hugo

    (Centre for Labour Market and Social Research, Aarhus School of Business)

  • Verner, Dorthe

    (Centre for Labour Market and Social Research, Aarhus School of Business)

Abstract

This paper analyzes the earnings determinants in the Ghanian manufacturing industries, focussing on the impact of unions in terms of the so-called "union relative wage effect" and the possible asymmetries of this impact across the earnings distribution. We find evidence of a union relative wage effect ocurring via two distinct channels. First, we find a direct effect through individual union membership. This is the standard "union premium" well known from the empirical litterature on unions. Second, we find evidence of a spillover effect to non-union members. In addition, we find evidence of an additional union effect coming through via firm-specific training. We confirm our conjecture of an asymmetry in the union relative wage effect, unions mainly benefiting the lower end of the wage distribution. This is in line with previous research, which generally finds that unions increase income equality and reduce wage discrimination. Evaluating the non-union sub-sample using the estimated union wage structure further establishes the presence of structural differences between the union and non-union segments of the Ghanian manufacturing industry in that for given characteristics, a worker in the union sector earns more than a worker in the non-union sector.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research in its series CLS Working Papers with number 01-7.

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Length: 35 pages
Date of creation: 01 Mar 2001
Date of revision:
Handle: RePEc:hhs:aarcls:2001_007

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Keywords: Africa; Ghana; Human capital; Union relative wage effect; Quantile regression;

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  1. Nelson, Joan M, 1991. "Organized Labor, Politics, and Labor Market Flexibility in Developing Countries," World Bank Research Observer, World Bank Group, World Bank Group, vol. 6(1), pages 37-56, January.
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  12. Velenchik, Ann D., 1997. "Government intervention, efficiency wages, and the employer size wage effect in Zimbabwe," Journal of Development Economics, Elsevier, Elsevier, vol. 53(2), pages 305-338, August.
  13. Panagides, Alexis & Patrinos, Harry Anthony & DEC, 1994. "Union - nonunion wage differentials in the developing world : a case study of Mexico," Policy Research Working Paper Series 1269, The World Bank.
  14. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
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