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Changes Over Time in Union Relative Wage Effects in Great Britain and the United States

  • David G. Blanchflower

This paper uses broadly comparable micro data at the level of the individual to examine the extent to which union relative wage effects vary across groups and through time. The main findings may be summarized as follows. a) The union wage gap averages 15% in the US and 10% in Great Britain. b) The gap is positively correlated with the (lagged) unemployment rate, and appears to be untrended in both countries. Union wages are sticky. c) The size of the wage gap varies across groups. In both the US and Great Britain the differential is relatively high in the private sector, in non-manufacturing, for manuals, the young and the least educated. d) In the US there are no differences by race or gender in the size of the differential. In Great Britain it is higher both for women and non-whites. The fact that the differential has remained more or less constant in both Great Britain and the US is a puzzle, particularly given the rapid declines in union membership in both countries. The evidence does not appear to be consistent with the widely held view that union power has been emasculated.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6100.

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Date of creation: Jul 1997
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Publication status: published as "Unionism in the United States and Other Advanced OECD Countries", Industrial Relations, Vol. 31, no. 1 (January 1992): 56-79.
Handle: RePEc:nbr:nberwo:6100
Note: LS
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  1. Wayne Simpson, 1985. "The Impact of Unions on the Structure of Canadian Wages: An Empirical Analysis with Microdata," Canadian Journal of Economics, Canadian Economics Association, vol. 18(1), pages 164-81, February.
  2. P. G. Moll, 1993. "Black South African Unions: Relative Wage Effects in International Perspective," ILR Review, Cornell University, ILR School, vol. 46(2), pages 245-261, January.
  3. David G. Blanchflower & Richard B. Freeman, 1993. "Did the Thatcher Reforms Change British Labour Performance?," NBER Working Papers 4384, National Bureau of Economic Research, Inc.
  4. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
  5. Blackaby, D. H. & Murphy, P. D. & Sloane, P. J., 1991. "Union membership, collective bargaining coverage and the trade union mark-up for Britain," Economics Letters, Elsevier, vol. 36(2), pages 203-208, June.
  6. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-10, November.
  7. Green, Francis, 1988. "The trade union wage gap in Britain: Some new estimates," Economics Letters, Elsevier, vol. 27(2), pages 183-187.
  8. David G. Blanchflower, 1990. "Fear, Unemployment and Pay Flexibility," NBER Working Papers 3365, National Bureau of Economic Research, Inc.
  9. Stewart, Mark B, 1986. "Collective Bargaining Arrangements Closed Shops and Relative Pay," The Warwick Economics Research Paper Series (TWERPS) 273, University of Warwick, Department of Economics.
  10. David Blanchflower & L Katz & G Loveman, 1993. "A Comparison of Changes in the Structure of Wages in Four OECD Countries," CEP Discussion Papers dp0144, Centre for Economic Performance, LSE.
  11. Lawrence F. Katz & Gary W. Loveman & David G. Blanchflower, 1993. "A Comparison of Changes in the Structure of Wages," NBER Working Papers 4297, National Bureau of Economic Research, Inc.
  12. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, June.
  13. Blanchflower, D. & Oswald, A., 1988. "The Determination Of White-Collar Pay," Papers 307, London School of Economics - Centre for Labour Economics.
  14. David BLANCHFLOWER & Stephen MACHIN, 1996. "Product Market Competition Wages and Productivity: International Evidence from Establishment-Level Data," Annales d'Economie et de Statistique, ENSAE, issue 41-42, pages 219-253.
  15. Stewart, Mark B, 1995. "Union Wage Differentials in an Era of Declining Unionization," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(2), pages 143-66, May.
  16. Peter G. Moll, 1993. "Black South African unions: Relative wage and inequality effects in international perspective," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(2), pages 245-261, January.
  17. Main, Brian G M & Reilly, Barry, 1993. "The Employer Size-Wage Gap: Evidence for Britain," Economica, London School of Economics and Political Science, vol. 60(238), pages 125-42, May.
  18. Ingram, Peter N, 1991. "Ten Years of Manufacturing Wage Settlements: 1979-89," Oxford Review of Economic Policy, Oxford University Press, vol. 7(1), pages 93-106, Spring.
  19. E. Kenneth Grant & Robert Swidinsky & John Vanderkamp, 1987. "Canadian union-nonunion wage differentials," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(1), pages 93-107, October.
  20. Costas MEGHIR & Annette RYAN & John VAN REENEN, 1996. "Job Creation, Technological Innovation and Adjustment Costs: Evidence from a Panel of British Firms," Annales d'Economie et de Statistique, ENSAE, issue 41-42, pages 255-274.
  21. Stephen B. Jarrell & T. D. Stanley, 1990. "A meta-analysis of the union-nonunion wage gap," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(1), pages 54-67, October.
  22. Schmidt, Christoph M, 1994. "Relative Wage Effects of German Unions," CEPR Discussion Papers 918, C.E.P.R. Discussion Papers.
  23. Metcalf, David & Stewart, Mark, 1992. "Closed Shops and Relative Pay: Institutional Arrangements or High Density?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 503-16, November.
  24. Stewart, Mark B, 1983. "Relative Earnings and Individual Union Membership in the United Kingdom," Economica, London School of Economics and Political Science, vol. 50(198), pages 111-25, May.
  25. Main, Brian G M & Reilly, Barry, 1992. "Women and the Union Wage Gap," Economic Journal, Royal Economic Society, vol. 102(410), pages 49-66, January.
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