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Wage Loss following Displacement: The Role of Union Coverage

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  • Peter Kuhn
  • Arthur Sweetman

Abstract

Using two Canadian data sets, the authors explore the role of union coverage in displaced workers' wage losses. While only 32% of the workers had unionized jobs prior to displacement, the wage loss suffered by these workers represented about 80% of the wages lost by all displaced workers in both samples. Losing union status was associated with large losses whether or not a worker switched industries after displacement. Extrapolating the results to the United States, the authors estimate that one-third to one-half of U.S. displaced workers' wage losses may be due purely to the loss of union coverage.

Suggested Citation

  • Peter Kuhn & Arthur Sweetman, 1998. "Wage Loss following Displacement: The Role of Union Coverage," ILR Review, Cornell University, ILR School, vol. 51(3), pages 384-400, April.
    • Handle: RePEc:sae:ilrrev:v:51:y:1998:i:3:p:384-400
    DOI: 10.1177/001979399805100302
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    References listed on IDEAS

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    Cited by:

    1. Riddell, W. Craig, 2009. "Economic Change and Worker Displacement in Canada: Consequences and Policy Responses," CLSSRN working papers clsrn_admin-2009-41, Vancouver School of Economics, revised 22 Jul 2009.
    2. Pierre Brochu & Louis-Philippe Morin, 2011. "Union Membership and Perceived Job Insecurity: 30 Years of Evidence from the American General social Survey," Working Papers 1106E, University of Ottawa, Department of Economics.
    3. Tingting Zhang, 2019. "Effects of Occupational Licensing and Unions on Labour Market Earnings in Canada," British Journal of Industrial Relations, London School of Economics, vol. 57(4), pages 791-817, December.
    4. Arnaud Lefranc, 2002. "Labor Market Dynamics and Wage Losses of Displaced Workers in France and the United-States," THEMA Working Papers 2002-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    5. David A. Green, 2015. "Chasing after “good jobs.” Do they exist and does it matter if they do?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(4), pages 1215-1265, November.
    6. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, vol. 8(1), pages 15-41, January.
    7. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    8. Chen, Wen-Hao & Morissette, René, 2010. "Have Employment Patterns of Older Displaced Workers Improved Since the Late 1970s?," CLSSRN working papers clsrn_admin-2010-20, Vancouver School of Economics, revised 27 May 2010.
    9. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    10. Riddell, W. Craig, 2011. "Unemployment Compensation and Adjustment Assistance for Displaced Workers: Policy Options for Canada," CLSSRN working papers clsrn_admin-2011-31, Vancouver School of Economics, revised 22 Dec 2011.
    11. Browning, Martin & Crossley, Thomas F., 2008. "The long-run cost of job loss as measured by consumption changes," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 109-120, July.
    12. Pierre Brochu & Lu Zhou, 2009. "Is job insecurity on the rise? Evidence from Canadian perception data," Canadian Journal of Economics, Canadian Economics Association, vol. 42(4), pages 1305-1325, November.
    13. Abhir Kulkarni & Barry T. Hirsch, 2021. "Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys," ILR Review, Cornell University, ILR School, vol. 74(4), pages 948-976, August.
    14. Eugene Beaulieu & Vivek Dehejia & Hazrat-Omar Zakhilwal, 2004. "International Trade, Labour Turnover, and the Wage Premium: Testing the Bhagwati-Dehejia Hypothesis for Canada," CESifo Working Paper Series 1149, CESifo.
    15. Pierre Brochu & Louis-Philippe Morin, 2012. "Union Membership and Perceived Job Insecurity: Thirty Years of Evidence from the American General Social Survey," ILR Review, Cornell University, ILR School, vol. 65(2), pages 263-285, April.
    16. Maor Milgrom, 2025. "The Costs of Job Displacement and the Demand for Industry-Specific Human Capital," CESifo Working Paper Series 11950, CESifo.

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