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Unions and Inequality over the Twentieth Century: New Evidence from Survey Data

Henry Farber, Daniel Herbst, Lyana Kuziemko and Suresh Naidu
Additional contact information
Henry Farber: Princeton University and NBER
Lyana Kuziemko: Princeton University and NBER
Suresh Naidu: Columbia University and NBER

Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: U.S. income inequality has varied inversely with union density over the past hundred years. But moving beyond this aggregate relationship has proven difficult, in part be-cause of limited micro-data on union membership prior to 1973. We develop a new source of micro-data on union membership dating back to 1936, survey data primarily from Gallup (N~980,000), to examine the long-run relationship between unions and inequality. We document dramatic changes in the demographics of union members:when density was at its mid-century peak, union households were much less educated and more non-white than other households, whereas pre-World-War-II and today they are more similar to non-union households on these dimensions. However, despite large changes in composition and density since 1936, the household union premium holds relatively steady between ten and twenty log points. We then use our data to examine the effect of unions on income inequality. Using distributional decompositions, time-series regressions, state-year regressions, as well as a new instrumental-variable strategy based on the 1935 legalization of unions and the World-War-II era War Labor Board,we find consistent evidence that unions reduce inequality, explaining a significant share of the dramatic fall in inequality between the mid-1930s and late 1940s.

JEL-codes: J51 N32 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-his and nep-ltv
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Citations: View citations in EconPapers (4)

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https://gceps.princeton.edu/wp-content/uploads/2021/06/277_Kuziemko.pdf

Related works:
Journal Article: Unions and Inequality over the Twentieth Century: New Evidence from Survey Data* (2021) Downloads
Working Paper: Unions and Inequality Over the Twentieth Century: New Evidence from Survey Data (2021) Downloads
Working Paper: Unions and Inequality Over the Twentieth Century: New Evidence from Survey Data (2018) Downloads
Working Paper: Unions and Inequality Over the Twentieth Century: New Evidence from Survey Data (2018) Downloads
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