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Closed Shops and Relative Pay: Institutional Arrangements or High Density?

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  • Metcalf, David
  • Stewart, Mark

Abstract

Employees in workplaces with a closed shop get paid more than their counterparts in comparable workplaces without a closed shop. Is this pay differential a consequence of high union density or the institution of the closed ship itself? The authors' results indicate that a post-entry closed shop adds no extra pay differential over and above that achieved by employees in workplaces with high union density but no closed shop. By contrast the preentry closed shop--where the union normally controls the labor supply and has the potential to impose substantial costs on the employer by striking--roughly doubles the premium gained by high density alone. The implications of their results for the likely impact on union wage premia of recent legal changes outlawing the closed shop are discussed. Copyright 1992 by Blackwell Publishing Ltd

Suggested Citation

  • Metcalf, David & Stewart, Mark, 1992. "Closed Shops and Relative Pay: Institutional Arrangements or High Density?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 503-516, November.
  • Handle: RePEc:bla:obuest:v:54:y:1992:i:4:p:503-16
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    References listed on IDEAS

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    1. von Braun, Joachim & Pandya-Lorch, Rajul, 1991. "Income sources of malnourished people in rural areas: Microlevel information and policy implications," IFPRI working papers 5, International Food Policy Research Institute (IFPRI).
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    3. John C. H. Fei & Gustav Ranis & Shirley W. Y. Kuo, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, Oxford University Press, vol. 92(1), pages 17-53.
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    5. Quan, Nguyen T., 1989. "Concentration of income and land holdings : Prediction by latent variables model and partial least squares," Journal of Development Economics, Elsevier, vol. 31(1), pages 55-76, July.
    6. Fields, Gary S, 1979. "Income Inequality in Urban Colombia: A Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(3), pages 327-341, September.
    7. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    8. Hans De Kruijk, 1987. "Sources of Income Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 659-672.
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    Cited by:

    1. Millward, N., 1993. "Uses of the workplace industrial relations surveys by British labour economists," LSE Research Online Documents on Economics 20964, London School of Economics and Political Science, LSE Library.
    2. N Millward, 1993. "Uses of the Workplace Industrial Relations Surveys by British Labour Economists," CEP Discussion Papers dp0145, Centre for Economic Performance, LSE.
    3. Böheim, René & Booth, Alison L., 2001. "The impact of bargaining institutions on employer-provided training in Britain," ISER Working Paper Series 2001-08, Institute for Social and Economic Research.
    4. David G. Blanchflower, 1997. "Changes Over Time in Union Relative Wage Effects in Great Britain and the United States," NBER Working Papers 6100, National Bureau of Economic Research, Inc.
    5. Metcalf, David, 1993. "Transformation of British industrial relations? Institutions, conduct and outcomes 1980-1990," LSE Research Online Documents on Economics 20981, London School of Economics and Political Science, LSE Library.
    6. John H. Pencavel, 2004. "The Surprising Retreat of Union Britain," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 181-232 National Bureau of Economic Research, Inc.
    7. David Metcalf, 1993. "Transformation of British Industrial Relations? Institutions, Conduct and Outcomes 1980-1990," CEP Discussion Papers dp0151, Centre for Economic Performance, LSE.

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