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The Impact of Deunionisation on Earnings Dispersion Revisited

Author

Listed:
  • Addison, John T.

    () (University of South Carolina)

  • Bailey, Ralph

    () (University of Birmingham)

  • Siebert, W. Stanley

    () (University of Birmingham)

Abstract

This paper examines the effects of union decline in Britain on changes in earnings dispersion between 1983 and 1995. As part and parcel of the exercise, the effects of changes in the wage gap and the variance gap are also calculated. Detailed findings are provided by gender and broad sector, allowing for worker characteristics and the skill gradient. Deunionisation is shown to account for surprisingly little of the increase in earnings dispersion in the private sector for either males or females. Although union decline has been more muted in the public sector, union effects are actually stronger here. In the public sector, unions no longer reduce earnings variation as much they once did by virtue of their growing tendency to organise more skilled groups.

Suggested Citation

  • Addison, John T. & Bailey, Ralph & Siebert, W. Stanley, 2003. "The Impact of Deunionisation on Earnings Dispersion Revisited," IZA Discussion Papers 724, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp724
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    References listed on IDEAS

    as
    1. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    2. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
    3. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
    4. David Card, 2001. "The Effect of Unions on Wage Inequality in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 54(2), pages 296-315, January.
    5. Amanda Gosling & Thomas Lemieux, 2004. "Labor Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States," NBER Chapters,in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 275-312 National Bureau of Economic Research, Inc.
    6. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc.
    7. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 635-666.
    8. Bell, Brian D & Pitt, Michael K, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
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    Citations

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    Cited by:

    1. Checchi, Daniele & Visser, Jelle & van de Werfhorst, Herman G., 2007. "Inequality and Union Membership: The Impact of Relative Earnings Position and Inequality Attitudes," IZA Discussion Papers 2691, Institute for the Study of Labor (IZA).
    2. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2009. "Wage Dispersion in a Partially Unionized Labor Force," GEMF Working Papers 2009-09, GEMF, Faculty of Economics, University of Coimbra.
    3. Hornstein, Andreas & Krusell, Per & Violante, Giovanni L., 2005. "The Effects of Technical Change on Labor Market Inequalities," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 20, pages 1275-1370 Elsevier.
    4. John T. Addison & Arnd Kölling & Paulino Teixeira, 2014. "Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. A Case of (Almost) Plus Ça Change?," GEMF Working Papers 2014-15, GEMF, Faculty of Economics, University of Coimbra.
    5. A Charlwood, 2005. "The De-Collectivisation of Pay Setting in Britain 1990-1998: Incidence, Determinants and Impact," CEP Discussion Papers dp0705, Centre for Economic Performance, LSE.
    6. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
    7. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    8. repec:pri:cepsud:113krusell is not listed on IDEAS
    9. Peng, Fei & Kang, Lili, 2013. "Market Mechanism and Skill Premiums in the UK 1972-2002," MPRA Paper 50195, University Library of Munich, Germany.
    10. Fitzenberger, Bernd & Kohn, Karsten, 2005. "Gleicher Lohn für gleiche Arbeit? : zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985-1997 (Equal pay for equal work? * on the relationship between union m," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 125-146.
    11. repec:iab:iabzaf:v:38:i:2/3:p:125-146 is not listed on IDEAS
    12. Daniele Checchi & Jelle Visser & Herman G. van de Werfhorst, 2010. "Inequality and Union Membership: The Influence of Relative Earnings and Inequality Attitudes," British Journal of Industrial Relations, London School of Economics, vol. 48(1), pages 84-108, March.
    13. Charlwood, Andy, 2005. "The de-collectivisation of pay setting in Britain 1990-1998: incidence, determinants and impact," LSE Research Online Documents on Economics 19881, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    wage gap; earnings dispersion; union structure; deunionization; private/public sector; variance gap;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • 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

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