IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/6520.html
   My bibliography  Save this paper

Falling Union Membership and Rising Wage Inequality: What's the Connection?

Author

Listed:
  • David Card

Abstract

This paper presents new evidence on the effects of changing union membership on trends in wage dispersion in the U.S. labor market. I use data from the mid-1970s and early 1990s to compare union membership rates for workers in different deciles of the wage distribution, and to calculate the effects of shifting unionism on wage inequality. Among men, union rates have fallen for most groups, with larger declines among the lowest-wage workers. I estimate that the decline in unions explains 10-20 percent of the rise in male wage inequality over the past 25 years. Among women, union membership has fallen for low-wage workers but risen for high-wage workers, with little change overall. Shifting union patterns have therefore had little effect on female inequality, and may have actually accentuated the rise in inequality. Economy-wide trends in union membership mask a sharp divergence between the private sector, where unions have been declining, and the public sector, where union membership rates have actually risen for most groups. Calculations by sector suggest that unions have been a significant force in forestalling the rise in wage inequality among public sector workers of both genders.

Suggested Citation

  • David Card, 1998. "Falling Union Membership and Rising Wage Inequality: What's the Connection?," NBER Working Papers 6520, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6520 Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w6520.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. David Card, 1992. "The Effect of Unions on the Distribution of Wages: Redistribution or Relabelling?," NBER Working Papers 4195, National Bureau of Economic Research, Inc.
    2. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    3. 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.
    4. Card, David & Lemieux, Thomas, 1996. "Wage dispersion, returns to skill, and black-white wage differentials," Journal of Econometrics, Elsevier, vol. 74(2), pages 319-361, October.
    5. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
    6. McKinley L. Blackburn & David E. Bloom & Richard B. Freeman, 1989. "The Declining Economic Position of Less-Skilled American Males," NBER Working Papers 3186, National Bureau of Economic Research, Inc.
    7. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-979, July.
    8. Dale Belman & John S. Heywood & John Lund, 1997. "Public Sector Earnings and the Extent of Unionization," ILR Review, Cornell University, ILR School, vol. 50(4), pages 610-628, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. Herzer, Dierk, 2014. "Unions and income inequality: a heterogenous cointegration and causality analysis," Working Paper 146/2014, Helmut Schmidt University, Hamburg.
    3. Addison, John T. & Siebert, W. Stanley, 2002. "Changes in Collective Bargaining in the U.K," IZA Discussion Papers 562, Institute for the Study of Labor (IZA).
    4. Panos, Georgios & Theodossiou, Ioannis, 2010. "Unionism and Peer-Referencing," Stirling Economics Discussion Papers 2010-03, University of Stirling, Division of Economics.
    5. Lisandro Abrego & John Whalley, 2002. "Decomposing Wage Inequality Change Using General Equilibrium Models," NBER Working Papers 9184, National Bureau of Economic Research, Inc.
    6. Panos, Georgios A. & Theodossiou, Ioannis, 2010. "Unionism and Peer-Referencing," SIRE Discussion Papers 2010-122, Scottish Institute for Research in Economics (SIRE).
    7. Abrego, Lisandro & Whalley, John, 2000. "The Choice of Structural Model in Trade-Wages Decompositions," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 462-477, August.
    8. Frederic Pryor, 2004. "Market Economic Systems," LIS Working papers 404, LIS Cross-National Data Center in Luxembourg.
    9. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    10. Pryor, Frederic L., 2005. "Market economic systems," Journal of Comparative Economics, Elsevier, pages 25-46.
    11. Marie Leclair & Pascale Petit, 2004. "Présence syndicale dans les établissements : quel effet sur les inégalités salariales entre les hommes et les femmes ?," Cahiers de la Maison des Sciences Economiques v04084, Université Panthéon-Sorbonne (Paris 1).
    12. Pallab Kumar Ghosh & Jae Yoon Lee, 2016. "Decomposition of Changes in Korean Wage Inequality, 1998–2007," Journal of Labor Research, Springer, vol. 37(1), pages 1-28, March.
    13. M. Leclair & P. Petit, 2003. "The Effects of Workplace Union on the Gender Wage Gap," Documents de Travail de la DESE - Working Papers of the DESE g2003-10, Institut National de la Statistique et des Etudes Economiques, DESE.
    14. Irac, D., 2000. "Estimation of a Time Varying NAIRU for France," Working papers 75, Banque de France.
    15. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    16. Frederic L. Pryor, 2004. "Economic Systems of OECD Nations: Impact and Evolution," Papers on Economics and Evolution 2004-14, Philipps University Marburg, Department of Geography.
    17. Marie Leclair & Pascale Petit, 2004. "Présence syndicale dans les établissements : quel effet sur les salaires masculins et féminins ?," Économie et Statistique, Programme National Persée, vol. 371(1), pages 23-47.
    18. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    19. Açıkgöz, Ömer Tuğrul & Kaymak, Barış, 2014. "The rising skill premium and deunionization," Journal of Monetary Economics, Elsevier, vol. 63(C), pages 37-50.
    20. David S. Loughran, 2000. "Does Variance Matter? The Effect of Rising Male Inequality on Female Age at First Marriage," Working Papers 00-12, RAND Corporation.
    21. Basak Kus, 2012. "Financialisation and Income Inequality in OECD Nations:1995-2007," The Economic and Social Review, Economic and Social Studies, vol. 43(4), pages 477-495.

    More about this item

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:6520. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.