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What Explains Wage Differences Between Union Members and Covered Nonmembers?

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  • Edward J. Schumacher

Abstract

An individual covered by a collective bargaining agreement but who is not a union member is estimated to earn about 13% lower wages than a union member. Sectors with relatively few covered nonmembers are associated with a large coverage differential, while sectors with high proportions of covered nonmembers are associated with small differentials. This suggests freeriders either weaken the bargaining position of the union or weak bargaining positions increase the incentive to freeride. Only a modest amount of this differential is accounted for by unmeasured ability, the probationary period associated with newly hired union workers, or union status misclassification.

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  • Edward J. Schumacher, 1999. "What Explains Wage Differences Between Union Members and Covered Nonmembers?," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 493-512, January.
    • Handle: RePEc:wly:soecon:v:65:y:1999:i:3:p:493-512
    DOI: 10.1002/j.2325-8012.1999.tb00172.x
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    References listed on IDEAS

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    Cited by:

    1. Kyung-nok Chun, 2023. "What do Right-to-Work Laws do to Unions? Evidence from Six Recently-Enacted RTW Laws," Journal of Labor Research, Springer, vol. 44(1), pages 94-144, June.
    2. Laszlo Goerke & Markus Pannenberg, 2012. "Risk Aversion and Trade‐Union Membership," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(2), pages 275-295, June.

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