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What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?

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Author Info
David G. Blanchflower
Alex Bryson

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Abstract

We explore the various claims made by Freeman and Medoff (FM) in their famous book What do unions do? about the impact of unions on wages and update them with new and better data. The main findings are as follows. 1) Private sector union wage premium is lower today than it was in the 1970s. 2) The union wage premium is counter-cyclical. 3) There is evidence of a secular decline in the private sector union wage premium. 4) There remains big variation in the premium across workers. 5) There is big variation in industry-level union wage premia. 6) State level union wage premia vary less than occupation and industry level premia. 7) Union workers remain better able than non-union workers to resist employer efforts to reduce wages when market conditions are unfavorable. 8) There has been a decline in the unadjusted wage gap relative to the regression-adjusted wage gap. 9) Public sector wage effects are large and similar to those in the private sector.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9973.

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Date of creation: Sep 2003
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Handle: RePEc:nbr:nberwo:9973

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Find related papers by JEL classification:
J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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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.:
  1. Staiger, Robert W, 1988. "Organized Labor and the Scope of International Specialization," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1022-47, October. [Downloadable!] (restricted)
    Other versions:
  2. Richard B. Freeman & Casey Ichniowski, 1988. "When Public Sector Workers Unionize," NBER Books, National Bureau of Economic Research, Inc, number free88-1.
  3. David Blanchflower, 1996. "The Role and Influence of Trade Unions in the OECD," CEP Discussion Papers dp0310, Centre for Economic Performance, LSE.
  4. Barry T. Hirsch & Edward J. Schumacher, . "Unions, Wages, and Skills," Working Papers 9606, East Carolina University, Department of Economics.
  5. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January. [Downloadable!] (restricted)
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  6. Bernt Bratsberg & James F. Ragan & Jr, 2002. "Changes in the union wage premium by industry," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(1), pages 65-83, October.
  7. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-44, October. [Downloadable!] (restricted)
  8. Henry S. Farber, 2001. "Notes on the Economics of Labor Unions," Working Papers 831, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  9. repec:fth:prinin:452 is not listed on IDEAS
  10. Alex Bryson, 2000. "Employee Voice, Workplace Closure and Employment Growth," PSI Research Discussion Series 6, Policy Studies Institute, UK. [Downloadable!]
  11. Richard B. Freeman & Morris M. Kleiner, 1999. "Do unions make enterprises insolvent?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 52(4), pages 510-527, July.
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  12. Richard J. Long, 1993. "The impact of unionization on employment growth of Canadian companies," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(4), pages 691-703, July.
  13. Richard B. Freeman & Karen Needels, 1991. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Working Papers 3827, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July. [Downloadable!] (restricted)
  15. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
  16. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
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  17. Hirsch, Barry T., 2003. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," IZA Discussion Papers 795, Institute for the Study of Labor (IZA). [Downloadable!]
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Cited by:
(explanations, 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.)

  1. MORIKAWA Masayuki, 2008. "What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data," Discussion papers 08027, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  2. Ponzo, Michela & Scoppa, Vincenzo, 2008. "The Use of Informal Networks in Italian Labor Markets: Efficiency or Favoritisms?," MPRA Paper 11764, University Library of Munich, Germany. [Downloadable!]
  3. David Blanchflower & Alex Bryson, 2004. "The Union Wage Premium in the US and the UK," CEP Discussion Papers dp0612, Centre for Economic Performance, LSE. [Downloadable!]
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