Advanced Search
MyIDEAS: Login to save this paper or follow this series

Wage Dispersion in a Partially Unionized Labor Force

Contents:

Author Info

  • Addison, John T.

    ()
    (University of South Carolina)

  • Bailey, Ralph

    ()
    (University of Birmingham)

  • Siebert, W. Stanley

    ()
    (University of Birmingham)

Abstract

Taking as our point of departure a model proposed by David Card (2001), we suggest new methods for analyzing wage dispersion in a partially unionized labor market. Card's method disaggregates the labor population into skill categories, which procedure entails some loss of information. Accordingly, we develop a model in which each worker individually is assigned a union-membership probability and predicted union and nonunion wages. The model yields a natural three-way decomposition of variance. The decomposition permits counterfactual analysis, using concepts and techniques from the theory of factorial experimental design. We examine causes of the increase in U.K. wage dispersion between 1983 and 1995. Of the factors initially considered, the most influential was a change in the structure of remuneration inside both the union and nonunion sectors. Next in importance was the decrease in union membership. Finally, exogenous changes in labor force characteristics had, for most groups considered, only a small negative effect. We supplement this preliminary three-factorial analysis with a five-factorial analysis that allows us to examine effects from the wage-equation parameters in greater detail.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp4202.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4202.

as in new window
Length: 38 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4202

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: wage dispersion; three-way variance decomposition; bivariate kernel density smoothing; union membership; deunionization; factorial experimental design;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
  2. Amanda Gosling & Thomas Lemieux, 2004. "Labor Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States," NBER Chapters, National Bureau of Economic Research, Inc, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 275-312 National Bureau of Economic Research, Inc.
  3. Nidardo, J. & Fortin, N. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Papers, California Irvine - School of Social Sciences 93-94-15, California Irvine - School of Social Sciences.
  4. Richard B. Freeman, 2005. "What Do Unions Do?-- The 2004 M-Brane Stringtwister Edition," Journal of Labor Research, Transaction Publishers, Transaction Publishers, vol. 26(4), pages 641-668, November.
  5. Richard B. Freeman, 1978. "Unionism and the Dispersion of Wages," NBER Working Papers, National Bureau of Economic Research, Inc 0248, National Bureau of Economic Research, Inc.
  6. Addison, John T. & Bailey, Ralph & Siebert, W. Stanley, 2003. "The Impact of Deunionisation on Earnings Dispersion Revisited," IZA Discussion Papers, Institute for the Study of Labor (IZA) 724, Institute for the Study of Labor (IZA).
  7. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, Econometric Society, vol. 64(4), pages 957-79, July.
  8. Bell, Brian D & Pitt, Michael K, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 60(4), pages 509-28, November.
  9. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, Elsevier, vol. 41(3-5), pages 647-657, April.
  10. Checchi, Daniele & Visser, Jelle & van de Werfhorst, Herman G., 2007. "Inequality and Union Membership: The Impact of Relative Earnings Position and Inequality Attitudes," IZA Discussion Papers, Institute for the Study of Labor (IZA) 2691, Institute for the Study of Labor (IZA).
  11. Juan Francisco Canal Domínguez & César Rodríguez Gutiérrez, 2004. "Collective Bargaining and Within-firm Wage Dispersion in Spain," British Journal of Industrial Relations, London School of Economics, London School of Economics, vol. 42(3), pages 481-506, 09.
  12. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, Transaction Publishers, vol. 25(4), pages 519-562, October.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp4202. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.