Project Leader: Alex Bryson
Sponsor: ESRC
Period: October 2002-September 2003
Background
This research will involve analysis of large-scale data sets for Britain and the United States to estimate the size of the union wage premium during the recent period of union decline. The data cover the period 1983-2001, the longest series of data on unions and wages for Britain.
The primary aim of the research is to establish precisely what has happened to the union wage premium to inform policy and academic debate. Our second aim is to establish the sensitivity of results to alternative estimation techniques accounting for the possibility that workers select into union status according to the gains they are likely to make.
Study Design
Through analyses of the British Social Attitudes Surveys for Britain and the Current Population Surveys for the United States, the research will examine whether the size of the union wage premium has changed since the early 1980s and, if so, why. Using multivariate techniques we shall isolate the contributions of union membership, on the one hand, and bargaining coverage, on the other, to any union premium. Multivariate techniques will control for a range of individual, workplace, regional and business cycle effects that may also influence wages. The work is joint with Professor Danny Blanchflower, Departmental Chair at the Department of Economics, Dartmouth College, Hanover, New Hampshire, USA
Importance of Research
Unions' impact on wages is one of the most researched issues in labour economics. This is because unions can affect individuals' earnings and the wage distribution by modifying the way that employers set wages. Some maintain that, in doing so, unions can be a force for good in tackling pay discrimination and low wages. Others argue that unions' ability to raise wages above their market rate can reduce firm profitability and cost jobs. It is therefore important to understand what influence unions are having on wages, and how this may have changed in an era of union decline. However, disparate findings from recent studies pose a difficulty for policy-makers and others wishing to understand union effects because methodological and data differences across studies make comparisons extremely difficult. This study tackles the problem by estimating the size of the union wage premium for Britain and the United States over the period 1983-2001. The purpose is to ascertain whether there has been a decline in the premium over that time and, if so, what is behind the decline and who has been affected.
Publications