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

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  • David G. Blanchflower
  • Alex Bryson

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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Bibliographic Info

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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Publication status: published as Blanchflower, David and Alex Bryson. "What effect do unions have on wages now and would Freeman and Medoff be surprised?" Journal of Labor Research 25, 3 (Summer 2004): 383-414.
Handle: RePEc:nbr:nberwo:9973

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  1. 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.
  2. Richard J. Long, 1993. "The impact of unionization on employment growth of Canadian companies," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(4), pages 691-703, July.
  3. 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.
  4. Bernt Bratsberg & James F. Ragan & Jr, 2002. "Changes in the union wage premium by industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(1), pages 65-83, October.
  5. John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High-Wage Workers and High-Wage Firms," CIRANO Working Papers 94s-23, CIRANO.
  6. Richard B. Freeman & Casey Ichniowski, 1988. "When Public Sector Workers Unionize," NBER Books, National Bureau of Economic Research, Inc, number free88-1.
  7. Richard B. Freeman & Morris M. Kleiner, 1994. "Do Unions Make Enterprises Insolvent?," NBER Working Papers 4797, National Bureau of Economic Research, Inc.
  8. 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.
  9. 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.
  10. Hirsch, Barry, 2003. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," IZA Discussion Papers 795, Institute for the Study of Labor (IZA).
  11. C. Jeffrey Waddoups, 2000. "Unions and Wages in Nevada's Hotel-Casino Industry," Journal of Labor Research, Transaction Publishers, vol. 21(2), pages 345-361, April.
  12. 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.
  13. David Blanchflower, 1996. "The Role and Influence of Trade Unions in the OECD," CEP Discussion Papers dp0310, Centre for Economic Performance, LSE.
  14. Henry S. Farber, 2001. "Notes on the Economics of Labor Unions," Working Papers 831, Princeton University, Department of Economics, Industrial Relations Section..
  15. Colin Lawrence & Robert Z. Lawrence, 1985. "Manufacturing Wage Dispersion: An End Game Interpretation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(1), pages 47-116.
  16. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
  17. Barry T. Hirsch & Edward J. Schumacher, . "Unions, Wages, and Skills," Working Papers 9606, East Carolina University, Department of Economics.
  18. repec:fth:prinin:452 is not listed on IDEAS
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Citations

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Cited by:
  1. Ponzo, Michela & Scoppa, Vincenzo, 2010. "The use of informal networks in Italy: Efficiency or favoritism?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 89-99, January.
  2. Unal Tongur & Adem Yavuz Elveren, 2013. "Deunionization and Pay Inequality in OECD Countries: A Panel Granger Causality Approach," ERC Working Papers 1306, ERC - Economic Research Center, Middle East Technical University, revised May 2013.
  3. Mathieu Bunel & Gilles Raveaud, 2011. "Union Membership does not pay," Working Papers halshs-00868217, HAL.
  4. Mathieu Bunel & Gilles Raveaud, 2012. "Union Membership does not pay: Evidence from recent French Micro Data," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201232, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  5. Stennek, Johan, 2012. "Why Unions Reduce Wage Inequality: A model of union formation and goal setting," Working Papers in Economics 539, University of Gothenburg, Department of Economics, revised 21 Feb 2013.
  6. 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).
  7. David Blanchflower & Alex Bryson, 2004. "The Union Wage Premium in the US and the UK," CEP Discussion Papers dp0612, Centre for Economic Performance, LSE.
  8. 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.

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