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Heterogeneity, Endogeneity, Measurement Error and Identification of the Union Wage Impact

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  • Chrysanthou, Georgios Marios

    () (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)

Abstract

We study union wage effects when membership is non-coercive and employers reserve the right of union recognition. Using the BHPS during 1995-2009 we find evidence of membership differentials for the lower male and middle female observed skill groups. The coverage differential at the bottom of the observed male skill distribution suggests free riding. While union members are negatively selected, there is evidence of positive selection at the bottom of the observed skill distribution. Using the unified measurement error and endogeneity bias expression, we obtain a discernible pattern between uncorrected, endogeneity corrected and fixed effects estimates of the union wage effect.

Suggested Citation

  • Chrysanthou, Georgios Marios, 2014. "Heterogeneity, Endogeneity, Measurement Error and Identification of the Union Wage Impact," QM&ET Working Papers 14-4, University of Alicante, D. Quantitative Methods and Economic Theory, revised 05 Nov 2014.
  • Handle: RePEc:ris:qmetal:2014_004
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    References listed on IDEAS

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    More about this item

    Keywords

    Union wage differentials; measurement error; unobserved heterogeneity; endogeneity;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • 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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