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Unionization and Wage Inequality: A Comparative Study of the U.S, the U.K., and Canada

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  • David Card
  • Thomas Lemieux
  • W. Craig Riddell

Abstract

This paper presents a comparative analysis of the link between unionization and wage inequality in the U.S., the U.K., and Canada. Our main motivation is to see whether unionization can account for differences and trends in wage inequality in industrialized countries. We focus on the U.S., the U.K., and Canada because the institutional arrangements governing unionization and collective bargaining are relatively similar in these three countries. The three countries also share large non-union sectors that can be used as a comparison group for the union sector. Using comparable micro data for the last two decades, we find that unions have remarkably similar qualitative impacts in all three countries. In particular, unions tend to systematically reduce wage inequality among men, but have little impact on wage inequality for women. We conclude that unionization helps explain a sizable share of cross-country differences in male wage inequality among the three countries. We also conclude that de-unionization explains a substantial part of the growth in male wage inequality in the U.K. and the U.S. since the early 1980s.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9473.

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Date of creation: Feb 2003
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Handle: RePEc:nbr:nberwo:9473

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References

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  1. 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).
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  8. Peter Kuhn, . "Canada and the "OECD Hypothesis": Does Labour Market Inflexibility Explain Canada's High Level of Unemployment?," Canadian International Labour Network Working Papers 10, McMaster University.
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  13. David Card & Richard B. Freeman, 1993. "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States," NBER Books, National Bureau of Economic Research, Inc, number card93-1, October.
  14. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
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Citations

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Cited by:
  1. Haile, Getinet Astatike & Bryson, Alex & White, Michael, 2012. "Heterogeneity in Union Status and Employee Well-Being," IZA Discussion Papers 7075, Institute for the Study of Labor (IZA).
  2. Marie Leclair & Pascale Petit, 2004. "Présence syndicale dans les établissements : quel effet sur les inégalités salariales entre les hommes et les femmes ?," Cahiers de la Maison des Sciences Economiques v04084, Université Panthéon-Sorbonne (Paris 1).
  3. Sebastián Galiani & Guido Porto, 2011. "Trends in Tariff Reforms and Trends in the Structure of Wages," CEDLAS, Working Papers 0124, CEDLAS, Universidad Nacional de La Plata.
  4. Landon, Stuart & Smith, Constance E., 2009. "Investment and the exchange rate: Short run and long run aggregate and sector-level estimates," Journal of International Money and Finance, Elsevier, vol. 28(5), pages 813-835, September.
  5. Myles, John Picot, Garnett, 2005. "L'inegalite du revenu et le faible revenu au Canada : une perspective internationale," Direction des etudes analytiques : documents de recherche 2005240f, Statistics Canada, Direction des etudes analytiques.
  6. Ilan Tojerow, 2008. "Industry wage differential, rent sharing and gender in Belgium," DULBEA Working Papers 08-20.RS, ULB -- Universite Libre de Bruxelles.
  7. Michel Dumont, 2008. "Working Paper 22-08 - Wages and employment by level of education and occupation in Belgium," Working Papers 0822, Federal Planning Bureau, Belgium.
  8. A Charlwood, 2005. "The De-Collectivisation of Pay Setting in Britain 1990-1998: Incidence, Determinants and Impact," CEP Discussion Papers dp0705, Centre for Economic Performance, LSE.
  9. Myles, John Picot, Garnett, 2005. "Income Inequality and Low Income in Canada: an International Perspective," Analytical Studies Branch Research Paper Series 2005240e, Statistics Canada, Analytical Studies Branch.
  10. Ozan Hatipoglu, 2007. "Inequality and Growth. Where Are We Headed? A Survey," Working Papers 2007/07, Bogazici University, Department of Economics.
  11. Peng, Fei & Kang, Lili, 2012. "Labour market institutions and skill premiums: an empirical analysis on the UK 1972-2002," MPRA Paper 38541, University Library of Munich, Germany.
  12. Pascale Petit, 2004. "Effet des syndicats sur les inégalités entre les femmes et les hommes : une revue de la littérature," Cahiers de la Maison des Sciences Economiques v04076, Université Panthéon-Sorbonne (Paris 1).
  13. Khor, Niny & Pencavel, John, 2008. "Measuring Income Mobility, Income Inequality, and Social Welfare for Households of the People’s Republic of China," ADB Economics Working Paper Series 145, Asian Development Bank.
  14. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers 2095, Harvard - Institute of Economic Research.
  15. Marie Leclair & Pascale Petit, 2004. "Présence syndicale dans les établissements : quel effet sur les salaires masculins et féminins ?," Économie et Statistique, Programme National Persée, vol. 371(1), pages 23-47.
  16. Koeniger, Winfried & Leonardi, Marco & Nunziata, Luca, 2004. "Labour Market Institutions and Wage Inequality," IZA Discussion Papers 1291, Institute for the Study of Labor (IZA).
  17. Nikutowski, Oliver, 2007. "Accelerated Technological Progress - An Explanation for Wage Dispersion and a Possible Solution to the Productivity Paradox," Discussion Papers in Economics 1925, University of Munich, Department of Economics.
  18. Knut Gerlach & Gesine Stephan, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(6), pages 629-645, November.
  19. Heather Boushey & Christian E. Weller, 2006. "Inequality and Household Economic Hardship in the United States of America," Working Papers 18, United Nations, Department of Economics and Social Affairs.
  20. Richard N. Block & Sheldon Friedman & Michelle Kaminski & Andy Levin (ed.), 2006. "Justice on the Job: Perspectives on the Erosion of Collective Bargaining in the United States," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number joj, Septiembr.

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