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Recent Longitudinal Evidence of Size and Union Threat Effects across Genders

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  • Wunnava, Phanindra V.

    ()
    (Middlebury College)

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    Abstract

    Based on data from the National Longitudinal Surveys of Youth covering years 2000 through 2008, it is evident that both male and female workers in medium/larger establishments receive not only higher wages but also have a higher probability of participating in benefit programs than those in smaller establishments. This reinforces the well-documented 'size' effect. Further, the firm size wage effects are much larger for men than women. The union wage effect decreases with establishment size for both genders. This supports the argument that large nonunion firms pay higher wages to discourage the entrance of unions (i.e., the 'threat' effect argument). In addition, the union wage premium is higher for males for small and medium firm sizes relative to females. This implies that unions in the large establishments may have a role to play in achieving a narrowing of the gender union wage gap. In other words, the threat of unionization could reduce union wage premiums for both genders as firm size increases. Given the presence of noticeable gender differences in estimated union effects on the different components of the compensation structure, unions should not treat both genders similarly with respect to wages and benefits.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6779.

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    Length: 15 pages
    Date of creation: Aug 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp6779

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    Related research

    Keywords: size effect; threat effect; random effects; fringe benefits; compensation; gender; union-nonunion;

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    References

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    1. Robinson, Michael D. & Wunnava, Phanindra V., 1991. "Plant size, tenure, and discrimination in internal labor markets : Evidence on sex differentials," Economics Letters, Elsevier, vol. 36(2), pages 197-202, June.
    2. Bramley, Donald G. & Wunnava, Phanindra V. & Robinson, Michael D., 1989. "A note on union-non-union benefit differentials and size of establishment," Economics Letters, Elsevier, vol. 30(1), pages 85-88.
    3. Thierry Lallemand & Robert Plasman & François Rycx, 2005. "The establishment-size wage premium: evidence from European countries," DULBEA Working Papers 05-07.RS, ULB -- Universite Libre de Bruxelles.
    4. Thierry Lallemand & Robert Plasman & François Rycx, 2005. "Why do large firms pay higher wages? evidence from matched worker-firm data," ULB Institutional Repository 2013/8743, ULB -- Universite Libre de Bruxelles.
    5. Roberto Pedace, 2010. "Firm Size-Wage Premiums: Using Employer Data to Unravel the Mystery," Journal of Economic Issues, M.E. Sharpe, Inc., vol. 44(1), pages 163-182, March.
    6. Dunn, L F, 1986. "Work Disutility and Compensating Differentials: Estimation of Factors in the Link between Wages and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 67-73, February.
    7. Wunnava, Phanindra V & Ewing, Bradley T, 2000. " Union-Nonunion Gender Wage and Benefit Differentials across Establishment Sizes," Small Business Economics, Springer, vol. 15(1), pages 47-57, August.
    8. Campbell, Carl M, III, 1993. "Do Firms Pay Efficiency Wages? Evidence with Data at the Firm Level," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 442-70, July.
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