Advanced Search
MyIDEAS: Login

Nonunion Wage Rates and the Threat of Unionization

Contents:

Author Info

  • Henry Farber
Registered author(s):

    Abstract

    I investigate how the the threat of union organization affects the wage paid to nonunion workers. I start by outlining the standard model of wage determination by a nonunion employer when faced with the threat of union organization. The model suggests that the nonunion wage will be directly related and the union wage gap will be inversely related to the threat. I use repeated cross-section data from the CPS from 1977-2002 to develop a measure of the threat as the predicted probability of union membership. I use this measure to estimate earnings functions that use several sources of variation in the likelihood of union membership to identify the threat effect in a manner that reduces the likelihood of omitted variable bias. Finally, I investigate two cases where there has arguably been a change in the likelihood of union organization that is not correlated with changes in the demand for labor. These include the wage changes surrounding the introduction of right-to-work (RTW) laws in two states during the period studied and wage changes surrounding deregulation of key industries in the late 1970s and early 1980s. The results are mixed. The preferred estimates from the analysis using predicted probability of unionization as the threat measure, imply very little relationship between either nonunion wages or the union wage gap and the threat. The estimates that rely on the introduction of RTW laws show a significant relationship between nonunion wages and the introduction of RTW laws in one of the two states. Stronger evidence of threat effects is found in the experience of deregulated industries, where regulation was a central factor in union strength.

    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://www.nber.org/papers/w9705.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9705.

    as in new window
    Length:
    Date of creation: May 2003
    Date of revision:
    Publication status: published as Farber, Henry S. "Nonunion Wage Rates And The Threat Of Unionization," Industrial and Labor Relations Review, 2005, v58(3,Apr), 335-352.
    Handle: RePEc:nbr:nberwo:9705

    Note: LS
    Contact details of provider:
    Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Email:
    Web page: http://www.nber.org
    More information through EDIRC

    Related research

    Keywords:

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. David Blanchflower & Alex Bryson, 2004. "The Union Wage Premium in the US and the UK," CEP Discussion Papers dp0612, Centre for Economic Performance, LSE.

    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:nbr:nberwo:9705. 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: ().

    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.