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An Analysis of Public- and Private-Sector Wages Allowing for Endogenous Choices of Both Government and Union Status

  • Gyourko, Joseph
  • Tracy, Joseph

A general selection model is estimated in which workers select across four labor markets-private/nonunion, privat e/union, public/nonunion, and public/union. Evidence is found of posi tive selection bias in the private/nonunion sector and of negative se lection bias in the public/union sector. Union wage differentials in the public and private sectors as well as public/private wage differe ntials are contrasted. The authors discuss when it is appropriate to use each type of differential. Copyright 1988 by University of Chicago Press.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 6 (1988)
Issue (Month): 2 (April)
Pages: 229-53

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Handle: RePEc:ucp:jlabec:v:6:y:1988:i:2:p:229-53
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  1. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  2. Gregory M. Duncan & Duane E. Leigh, 1980. "Wage Determination in the Union and Nonunion Sectors: A Sample Selectivity Approach," ILR Review, Cornell University, ILR School, vol. 34(1), pages 24-34, October.
  3. Ronald G. Ehrenberg & Daniel R. Sherman & Joshua L. Schwarz, 1983. "Unions and Productivity in the Public Sector: A Study of Municipal Libraries," ILR Review, Cornell University, ILR School, vol. 36(2), pages 199-213, January.
  4. Farber, Henry S, 1984. "Right-to-Work Laws and the Extent of Unionization," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 319-52, July.
  5. Richard B. Freeman, 1981. "Union Wage Practices and Wage Dispersion within Establishments," NBER Working Papers 0752, National Bureau of Economic Research, Inc.
  6. William H. Baugh & Joe A. Stone, 1982. "Teachers, Unions, and Wages in the 1970s: Unionism Now Pays," ILR Review, Cornell University, ILR School, vol. 35(3), pages 368-376, April.
  7. Sharon P. Smith, 1976. "Pay Differentials between Federal Government and Private Sector Workers," ILR Review, Cornell University, ILR School, vol. 29(2), pages 179-197, January.
  8. Casey Ichniowski, 1978. "Economic Effects of The Firefighters' Union," NBER Working Papers 0291, National Bureau of Economic Research, Inc.
  9. Morley Gunderson, 1979. "Earnings Differentials between the Public and Private Sectors," Canadian Journal of Economics, Canadian Economics Association, vol. 12(2), pages 228-42, May.
  10. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
  11. Borjas, George J, 1982. "The Politics of Employment Discrimination in the Federal Bureaucracy," Journal of Law and Economics, University of Chicago Press, vol. 25(2), pages 271-99, October.
  12. Ehrenberg, Ronald G, 1973. "The Demand for State and Local Government Employees," American Economic Review, American Economic Association, vol. 63(3), pages 366-79, June.
  13. Bartel, Ann & Lewin, David, 1981. "Wages and Unionism in the Public Sector: The Case of Police," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 53-59, February.
  14. Walter Fogel & David Lewin, 1974. "Wage Determination in the Public Sector," ILR Review, Cornell University, ILR School, vol. 27(3), pages 410-431, April.
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