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Asymmetries in union relative wage effects in Ghanaian manufacturing - an analysis applying quantile regressions

  • Blunch, Niels-Hugo
  • Verner, Dorte

The authors analyze the determinants of earnings in Ghanaian manufacturing, focusing on the impact of unions in terms of the"union relative wage effect", and the possible asymmetries of this effect across the earnings distribution. They find evidence of a union relative wage effect occurring through two distinct channels. First, there is a direct effect through individual union membership, the standard"union premium", well known from the empirical literature on unions. Second, there is a spillover effect to non-union members. The authors also find evidence of an additional union effect, that comes through firm-specific training. They confirm their conjecture that there is an asymmetry in the union relative wage effect: unions benefit mainly at the lower end of the wage distribution. This finding is in line with earlier research, which generally finds that unions reduce income inequality, and wage discrimination. An evaluation of the non-union sub-sample, using the estimated union wage structure, confirms the presence of structural differences between the union, and non-union segments of Ghanaian manufacturing: for given characteristics, a worker in the union sector earns more than a worker in the non-union sector.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2570.

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Date of creation: 31 Mar 2001
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Handle: RePEc:wbk:wbrwps:2570
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  1. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
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  5. Maloney, William F. & Pontual Ribeiro, Eduardo, 1999. "Efficiency wage and union effects in labor demand and wage structure in Mexico - An application of quantile analysis," Policy Research Working Paper Series 2131, The World Bank.
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  9. Standing, Guy, 1992. "Do Unions Impede or Accelerate Structural Adjustment? Industrial versus Company Unions in an Industrialising Labour Market," Cambridge Journal of Economics, Oxford University Press, vol. 16(3), pages 327-54, September.
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  11. Buchinsky, Moshe, 1995. "Estimating the asymptotic covariance matrix for quantile regression models a Monte Carlo study," Journal of Econometrics, Elsevier, vol. 68(2), pages 303-338, August.
  12. Velenchik, Ann D., 1997. "Government intervention, efficiency wages, and the employer size wage effect in Zimbabwe," Journal of Development Economics, Elsevier, vol. 53(2), pages 305-338, August.
  13. T. Paul Schultz & Germano Mwabu, 1998. "Labor Unions and the Distribution of Wages and Employment in South Africa," ILR Review, Cornell University, ILR School, vol. 51(4), pages 680-703, July.
  14. Booth, Alison L & Francesconi, Marco & Zoega, Gylfi, 1999. "Training, Rent-Sharing and Unions," CEPR Discussion Papers 2200, C.E.P.R. Discussion Papers.
  15. 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.
  16. Rama, Martin, 1998. "Wage misalignment in CFA countries: are labor market policies to blame?," Policy Research Working Paper Series 1873, The World Bank.
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