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Union Membership Effect on Wage Premiums: Evidence from Organized Manufacturing Industries in India

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  • Bhandari, Amit Kumar

    ()
    (Kalyani Institute of Applied Research, Training and Development)

Abstract

Trade unionism is a legislative system of organizing workers and raising voices for economic and social goods. As the process of global integration deepens the labour market become more flexible and fragmented, rendering collective organization more and more difficult. In this backdrop, the paper attempted to analyse the impact of union membership on wages in the organised manufacturing industries in India. The study uses a recent survey data on labour market in the organised manufacturing industries. The estimated wage premiums for union membership for permanent and contract workers are 56.7 per cent and 10.3 per cent respectively. Decomposing this wage gap indicates that union membership contributes majority of the wage differentials, indicating that unions able to reserve higher premium for their members. In general, it refutes the problem of free riding the benefits in the organized manufacturing industries in India.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3747.

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Length: 16 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3747

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Keywords: trade unions; wage differentials; manufacturing;

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Cited by:
  1. Richard B. Freeman, 2009. "Labor Regulations, Unions, and Social Protection in Developing Countries: Market distortions or Efficient Institutions?," NBER Working Papers 14789, National Bureau of Economic Research, Inc.

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