IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/315.html
   My bibliography  Save this paper

Are there gains to joining a union? Evidence from Mexico

Author

Listed:
  • Gutiérrez Rufrancos, Héctor Elías

Abstract

Union density in Mexico has been in decline since the 1980s. This paper provides ev- idence on the worker compensation gains (losses) made by males upon joining (leaving) a union. These are estimated using a nationally representative labour market survey covering 2005q1-2016q1. The transitions between non-union and union status are investigated using a difference-in-difference estimator. The findings suggest that joining a union is associated with modest wage gains, contrary to what the literature has shown for most industrialised nations. However, in contrast to this some union leavers are found to experience a decrease in wages. This paper also contributes to the wider literature by providing the first estimates of the longitudinal gain (loss) associated with joining (leaving) a union with respect to non-wage benefits. The findings show joining (leaving) a union increases (decreases) the probability of being in receipt of legally guaranteed benefits such as bonuses and paid holidays. This sug- gests that although union density may be in decline, unions still have an important role to play in voicing worker's preferences with respect to compensation and ensuring that employers comply with the law.

Suggested Citation

  • Gutiérrez Rufrancos, Héctor Elías, 2019. "Are there gains to joining a union? Evidence from Mexico," GLO Discussion Paper Series 315, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:315
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/191763/1/GLO-DP-0315.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Oscar Landerretche & Nicolás Lillo & Esteban Puentes, 2013. "The Union Effect on Wages in Chile: A Two-Stage Approach Using Panel Data," LABOUR, CEIS, vol. 27(2), pages 164-191, June.
    2. John W. Budd & Karen Mumford, 2004. "Trade Unions and Family-Friendly Policies in Britain," ILR Review, Cornell University, ILR School, vol. 57(2), pages 204-222, January.
    3. 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.
    4. David Card & Thomas Lemieux & W. Craig Riddell, 2020. "Unions and wage inequality: The roles of gender, skill and public sector employment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 140-173, February.
    5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    6. John W. Budd, 2005. "The Effect of Unions on Employee Benefits: Updated Employer Expenditure Results," Journal of Labor Research, Transaction Publishers, vol. 26(4), pages 669-676, November.
    7. Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
    8. Kristin F. Butcher & Cecilia Elena Rouse, 2001. "Wage Effects of Unions and Industrial Councils in South Africa," ILR Review, Cornell University, ILR School, vol. 54(2), pages 349-374, January.
    9. Standing, Guy, 1992. "Do Unions Impede or Accelerate Structural Adjustment? Industrial versus Company Unions in an Industrialising Labour Market," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 16(3), pages 327-354, September.
    10. Robert Kornfeld, 1993. "The Effects of Union Membership on Wages and Employee Benefits: The Case of Australia," ILR Review, Cornell University, ILR School, vol. 47(1), pages 114-128, October.
    11. David Fairris, 2003. "Unions and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 56(3), pages 481-497, April.
    12. John DiNardo & David S. Lee, 2004. "Economic Impacts of New Unionization on Private Sector Employers: 1984–2001," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(4), pages 1383-1441.
    13. Mark Harcourt & Geoffrey Wood & Sondra Harcourt, 2004. "Do Unions Affect Employer Compliance with the Law? New Zealand Evidence for Age Discrimination," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 527-541, September.
    14. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
    15. Hristos Doucouliagos & Richard B. Freeman & Patrice Laroche & T. D. Stanley, 2018. "How Credible Is Trade Union Research? Forty Years of Evidence on the Monopoly–Voice Trade-Off," ILR Review, Cornell University, ILR School, vol. 71(2), pages 287-305, March.
    16. 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.
    17. Pradhan, Menno & van Soest, Arthur, 1995. "Formal and informal sector employment in urban areas of Bolivia," Labour Economics, Elsevier, vol. 2(3), pages 275-297, September.
    18. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    19. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 125-156, January.
    20. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    21. David Fairris, 2006. "Union Voice Effects in Mexico," British Journal of Industrial Relations, London School of Economics, vol. 44(4), pages 781-800, December.
    22. Lixin Cai & C. Jeffrey Waddoups, 2011. "Union Wage Effects in Australia: Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages 279-305, July.
    23. Gutiérrez Rufrancos, Héctor Elías, 2017. "What do Mexican unions do?," Economics PhD Theses 0117, Department of Economics, University of Sussex Business School.
    24. Gasparini Leonardo & Leonardo Tornaroli, 2009. "Labor Informality in Latin America and the Caribbean: Patterns and Trends from Household Survey Microdata," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    25. Alison L. Booth & Mark L. Bryan, 2004. "The Union Membership Wage-Premium Puzzle: Is There a Free Rider Problem?," ILR Review, Cornell University, ILR School, vol. 57(3), pages 402-421, April.
    26. John DiNardo & David S. Lee, 2004. "Economic Impacts of Unionization on Private Sector Employers: 1984-2001," NBER Working Papers 10598, National Bureau of Economic Research, Inc.
    27. Arbache, Jorge Saba & Carneiro, Francisco Galrao, 1999. "Unions and Interindustry Wage Differentials," World Development, Elsevier, vol. 27(10), pages 1875-1883, October.
    28. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    29. 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 415-433, June.
    30. Robinson, Chris, 1989. "Union Endogeneity and Self-selection," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 106-112, January.
    31. repec:eee:labchp:v:2:y:1986:i:c:p:1219-1260 is not listed on IDEAS
    32. Fernando Rios-Avila & Barry T. Hirsch, 2014. "Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 1-27, January.
    33. Robinson, Chris & Tomes, Nigel, 1984. "Union Wage Differentials in the Public and Private Sectors: A Simultaneous Equations Specification," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 106-127, January.
    34. Hristos Doucouliagos & Richard Freeman & Patrice Laroche & T.D. Stanley, 2018. "How Credible Is Trade Union Research? Forty Years of Evidence on the Monopoly–Voice Trade-Off," Post-Print hal-02137429, HAL.
    35. Richard B. Freeman, 1981. "The Effect of Unionism on Fringe Benefits," ILR Review, Cornell University, ILR School, vol. 34(4), pages 489-509, July.
    36. Loayza, Norman & Sugawara, Naotaka, 2009. "El sector informal en México. Hechos y explicaciones fundamentales," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(304), pages 887-920, octubre-d.
    37. repec:eee:labchp:v:2:y:1986:i:c:p:1139-1181 is not listed on IDEAS
    38. John W. Budd & Brian P. McCall, 1997. "The Effect of Unions on the Receipt of Unemployment Insurance Benefits," ILR Review, Cornell University, ILR School, vol. 50(3), pages 478-492, April.
    39. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    40. Barry T. Hirsch & David A. MacPherson & J. Michael Dumond, 1997. "Workers#x0027; Compensation Recipiency in Union and Nonunion Workplaces," ILR Review, Cornell University, ILR School, vol. 50(2), pages 213-236, January.
    41. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    42. 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.
    43. Joanna K. Swaffield, 2001. "Does Measurement Error Bias Fixed‐effects Estimates of the Union Wage Effect?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 437-457, September.
    44. repec:bla:revinw:v:46:y:2000:i:2:p:139-59 is not listed on IDEAS
    45. 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.
    46. Niels-Hugo Blunch & Dorte Verner, 2004. "Asymmetries in the Union Wage Premium in Ghana," The World Bank Economic Review, World Bank, vol. 18(2), pages 237-252.
    47. repec:bla:econom:v:50:y:1983:i:198:p:111-25 is not listed on IDEAS
    48. repec:bla:ecorec:v:68:y:1992:i:201:p:125-41 is not listed on IDEAS
    49. repec:bla:econom:v:41:y:1974:i:162:p:194-210 is not listed on IDEAS
    50. repec:bla:obuest:v:63:y:2001:i:4:p:437-57 is not listed on IDEAS
    51. John W. Budd, 2004. "Non-Wage Forms of Compensation," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 597-622, October.
    52. Gary S. Fields & Gyeongjoon Yoo, 2000. "Falling Labor Income Inequality In Korea'S Economic Growth: Patterns And Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fernando Rios-Avila & Barry T. Hirsch, 2014. "Unions, Wage Gaps, and Wage Dispersion: New Evidence from the Americas," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 1-27, January.
    2. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    3. Freeman, Richard B., 2010. "Labor Regulations, Unions, and Social Protection in Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4657-4702, Elsevier.
    4. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    5. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    6. James Bishop & Iris Chan, 2019. "Is Declining Union Membership Contributing to Low Wages Growth?," RBA Annual Conference Papers acp2019-06, Reserve Bank of Australia.
    7. Susan Hayter, 2015. "Unions and collective bargaining," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 4, pages 95-122, Edward Elgar Publishing.
    8. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    9. Matthew Knepper, 2020. "From the Fringe to the Fore: Labor Unions and Employee Compensation," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 98-112, March.
    10. Lu, Yi & Tao, Zhigang & Wang, Yijiang, 2010. "Union effects on performance and employment relations: Evidence from China," China Economic Review, Elsevier, vol. 21(1), pages 202-210, March.
    11. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 125-156, January.
    12. Douglas Amuli Ibale, 2020. "Earning structure and heterogeneity of the labor market: Evidence from DR Congo," LIDAM Discussion Papers IRES 2020037, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    13. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2018. "Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data," IZA Discussion Papers 12013, Institute of Labor Economics (IZA).
    14. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    15. Amina Ika Micah, 2022. "Three essays on access to credit and financial shock in Nigeria," Economics PhD Theses 0422, Department of Economics, University of Sussex Business School.
    16. Abhir Kulkarni & Barry T. Hirsch, 2021. "Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys," ILR Review, Cornell University, ILR School, vol. 74(4), pages 948-976, August.
    17. Kerr, Andrew & Wittenberg, Martin, 2021. "Union wage premia and wage inequality in South Africa," Economic Modelling, Elsevier, vol. 97(C), pages 255-271.
    18. Hector Elias Gutierrez Rufrancos, 2012. "The Mexican Wage Curve 2000-2003: A Quantile Analysis," Working Paper Series 3412, Department of Economics, University of Sussex Business School.
    19. Raaj Tiagi, 2010. "Public Sector Wage Premium in Canada: Evidence from Labour Force Survey," LABOUR, CEIS, vol. 24(4), pages 456-473, December.
    20. Hansen, Henrik & Rand, John & Win, Ngu Wah, 2022. "The gender wage gap in Myanmar: Adding insult to injury?," Journal of Asian Economics, Elsevier, vol. 81(C).

    More about this item

    Keywords

    unions; wages; Mexico; non-wage benefits;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:glodps:315. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.