Union Wage Effects in Australia: Evidence from Panel Data
AbstractUsing data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, our research indicates that unobserved heterogeneity substantially biases cross-sectional estimates of union wage effects upward for both males and females. Estimates of the union wage premium for male workers between the ages of 25 and 64 fall from 8.7% to 5.2% after controlling for unobserved heterogeneity. For females age 25 to 63 the estimated 4.0% cross-sectional union wage premium falls to 1.9% once unobserved heterogeneity is controlled for. Our results also indicate positive sorting by unobserved skills into union membership, especially among low skilled male and female workers. There is also evidence of negative sorting into unions among the most highly skilled.
Download InfoIf 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.
Bibliographic InfoPaper provided by University of Nevada, Las Vegas , Department of Economics in its series Working Papers with number 0914.
Length: 36 pages
Date of creation: Jan 2009
Date of revision:
union wage effects; fixed effects models; panel data JEL codes: JEL: J31; J51;
Other versions of this item:
- Lixin Cai & C. Jeffrey Waddoups, 2011. "Union Wage Effects in Australia: Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages s279-s305, 07.
- Lixin Cai & C. Jeffrey Waddoups, 2008. "Union Wage Effects in Australia: Evidence from Panel Data," CEPR Discussion Papers 585, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-16 (All new papers)
- NEP-BEC-2009-05-16 (Business Economics)
- NEP-LAB-2009-05-16 (Labour Economics)
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.:
- Mark Wooden, 2000.
"Union Wage Effects in the Presence of Enterprise Bargaining,"
Melbourne Institute Working Paper Series
wp2000n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Wooden, Mark, 2001. "Union Wage Effects in the Presence of Enterprise Bargaining," The Economic Record, The Economic Society of Australia, vol. 77(236), pages 1-18, March.
- Mellow, Wesley S, 1981. "Unionism and Wages: A Longitudinal Analysis," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 43-52, February.
- Booth, Alison L & Bryan, Mark L, 2001.
"The Union Membership Wage Premium Puzzle: Is There A Free-Rider Problem?,"
CEPR Discussion Papers
2879, C.E.P.R. Discussion Papers.
- Alison L. Booth & Mark L. Bryan, 2004. "The union membership wage-premium puzzle: Is there a free rider problem?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 57(3), pages 402-421, April.
- 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.
- Lixin Cai & C. Jeffrey Waddoups, 2009. "The Role of Unobserved Heterogeneity and On-the-Job Training in the Employer Size-Wage Effect: Evidence from Australia," Working Papers 0915, University of Nevada, Las Vegas , Department of Economics.
- Barry T. Hirsch & Edward J. Schumacher, .
"Unions, Wages, and Skills,"
9606, East Carolina University, Department of Economics.
- Miller, Paul & Mulvey, Charles, 1993.
"What Do Australians Unions Do?,"
The Economic Record,
The Economic Society of Australia, vol. 69(206), pages 315-42, September.
- Miller, Paul & Mulvey, Charles, 1992. "What Do Australian Unions Do?," Institute for Research on Labor and Employment, Working Paper Series qt7rk2x5x2, Institute of Industrial Relations, UC Berkeley.
- Green, Francis & Machin, Stephen & Manning, Alan, 1996. "The Employer Size-Wage Effect: Can Dynamic Monopsony Provide an Explanation?," Oxford Economic Papers, Oxford University Press, vol. 48(3), pages 433-55, July.
- Brown, Charles & Medoff, James, 1989.
"The Employer Size-Wage Effect,"
Journal of Political Economy,
University of Chicago Press, vol. 97(5), pages 1027-59, October.
- Rae Cooper & Bradon Ellem, 2008. "The Neoliberal State, Trade Unions and Collective Bargaining in Australia," British Journal of Industrial Relations, London School of Economics, vol. 46(3), pages 532-554, 09.
- Joan R. Rodgers, 2004. "Hourly Wages of full-time and part-time employees in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 231-254, June.
- Lixin Cai & Amy Y.C. Liu, 2008. "Union Wage Effects in Australia: Is There Variation along the Distribution?," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 496-510, December.
- Swaffield, Joanna K, 2001. " Does Measurement Error Bias Fixed-Effects Estimates of the Union Wage Effect?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 437-57, September.
- Richard B. Freeman, 1980.
"Unionism and the Dispersion of Wages,"
NBER Working Papers
0248, National Bureau of Economic Research, Inc.
- Mark Wooden & Nicole Watson, 2007. "The HILDA Survey and its Contribution to Economic and Social Research (So Far)," The Economic Record, The Economic Society of Australia, vol. 83(261), pages 208-231, 06.
- Andrews, Martyn J. & Stewart, Mark B. & Swaffield, Joanna K. & Upward, Richard, 1998. "The estimation of union wage differentials and the impact of methodological choices," Labour Economics, Elsevier, vol. 5(4), pages 449-474, December.
- David Blanchflower & Alex Bryson, 2002. "Changes over time in union relative wage effects in the UK and the US revisited," NBER Working Papers 9395, National Bureau of Economic Research, Inc.
- Walsh, Frank, 2013. "The union wage effect and ability bias: Evidence from Ireland," Economics Letters, Elsevier, vol. 119(3), pages 296-298.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bill Robinson).
If references are entirely missing, you can add them using this form.