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Vulnerable Seniors: Unions, Tenure and Wages Following Permanent Job Loss

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  • Peter Kuhn
  • Arthur Sweetman

Abstract

A well known finding in the literature on displaced workers is the apparent “portability” of tenure across firms: controlling for experience and other observable characteristics, workers with high levels of predisplacement tenure earn higher postdisplacement wages (e.g. Kletzer 1989). Using four data sets on displaced workers, we show that this finding is reversed for workers losing unionized jobs. Our finding cannot be explained by firm- or industry-specific human capital accumulation, deferred-pay policies, standard matching models, or by a correlation between tenure and re-entry rates into unionized jobs. We argue instead that it can reflect only two possible processes: negative selection of senior union workers, or a negative causal effect of unionism on workers’ alternative skills. An important implication of our findings is that, despite a much flatter predisplacement tenure-wage profile, displaced union workers’ wage losses increase with tenure at a comparable or higher rate to that of nonunion workers.

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  • Peter Kuhn & Arthur Sweetman, "undated". "Vulnerable Seniors: Unions, Tenure and Wages Following Permanent Job Loss," Canadian International Labour Network Working Papers 20, McMaster University.
  • Handle: RePEc:mcm:cilnwp:20
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    References listed on IDEAS

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    Cited by:

    1. Christopher J. O'Leary & Randall W. Eberts, 2008. "Reemployment and Earnings Recovery among Older Unemployment Insurance Claimants," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research.
    2. Peter Haan & Michal Myck, 2009. "Dynamics of Poor Health and Non-employment," SOEPpapers on Multidisciplinary Panel Data Research 195, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Centeno, Mário & Corrêa, Márcio, 2010. "Job matching, technological progress, and worker-provided on-the-job training," Economics Letters, Elsevier, vol. 109(3), pages 190-192, December.
    4. David Green & Thomas Lemieux, 2007. "The impact of unionization on the incidence of and sources of payment for training in Canada," Empirical Economics, Springer, vol. 32(2), pages 465-489, May.
    5. Anja Deelen, 2011. "Wage-Tenure Profiles and Mobility," CPB Discussion Paper 198, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    7. Till von Wachter & Elizabeth Handwerker & Andrew Hildreth, 2009. "Estimating the "True" Cost of Job Loss: Evidence Using Matched Data from Califormia 1991-2000," Working Papers 09-14, Center for Economic Studies, U.S. Census Bureau.
    8. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    9. José M. Arranz & Carlos García-Serrano & María A. Davia, 2010. "Worker Turnover And Wages In Europe: The Influence Of Unemployment And Inactivity," Manchester School, University of Manchester, vol. 78(6), pages 678-701, December.

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