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Union - nonunion wage differentials in the developing world : a case study of Mexico

  • Panagides, Alexis
  • Patrinos, Harry Anthony
  • DEC

Union-nonunion wage differentials have been extensively studied by labor economists, but for lack of data on the developing world the study has been confined largely to the industrial world. This paper is one of the first attempts to empirically examine those differentials in a developing country. The authors find that union-nonunion wage differentials in Mexico have many of the same patterns as those in industrial nations. But there are marked differences. Based on a household survey in 1989, the authors find that: (i) overall, the union-nonunion wage gap is 10.4 percent; (ii) unions have a positive impact on the earnings of employed women and indigenous people; and (iii) organized labor in Mexico's northern states is considerably weaker in collective bargaining strength than it is elsewhere in Mexico.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1269.

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Date of creation: 31 Mar 1994
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Handle: RePEc:wbk:wbrwps:1269
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  1. Freeman, Richard B, 1993. "Labor Markets and Institutions in Economic Development," American Economic Review, American Economic Association, vol. 83(2), pages 403-08, May.
  2. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
  3. Robinson, Chris, 1989. "Union Endogeneity and Self-selection," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 106-12, January.
  4. 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.
  5. Nelson, Joan M, 1991. "Organized Labor, Politics, and Labor Market Flexibility in Developing Countries," World Bank Research Observer, World Bank Group, vol. 6(1), pages 37-56, January.
  6. Duncan, Gregory M & Leigh, Duane E, 1985. "The Endogeneity of Union Status: An Empirical Test," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 385-402, July.
  7. 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.
  8. Horton, Susan & Kanbur, Ravi & Mazumdar, Dipak, 1991. "Labor markets in an era of adjustment : an overview," Policy Research Working Paper Series 694, The World Bank.
  9. Patrinos, Harry Anthony & Sakellariou, Chris N., 1992. "North American Indians in the Canadian labour market: A decomposition of wage differentials," Economics of Education Review, Elsevier, vol. 11(3), pages 257-266, September.
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