Wage Dispersion in a Partially Unionized Labor Force

John Addison (), Ralph W. Bailey () and Stan Siebert ()

No 2009-09, GEMF Working Papers from GEMF - Faculdade de Economia, Universidade de Coimbra

Abstract: Wage Dispersion in a Partially Unionized Labor Force This paper critiques Card’s (2001) method for analyzing wage dispersion in a partially unionized labor market based on a disaggregation of the population into skill categories. We argue that disaggregation is a good idea, the use of skill categories less so. We offer a modified model in which each worker is assigned a union-membership probability, a predicted union wage, and a predicted nonunion wage. Our model provides a natural three-way decomposition of variance, and is also suited to counterfactual analysis. By way of an application, we examine the effect of de-unionization on wage dispersion in the United Kingdom between 1983 and 1995, reporting that the decline in membership accounts for only about one-fifth of the observed increase in wage dispersion.

Keywords: wage dispersion; three-way variance decomposition; bivariate kernel density smoothing; union membership; deunionization. (search for similar items in EconPapers)
JEL-codes: D3 J31 J51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-lab and nep-ltv
Date: 2009-07
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Related works:
Working Paper: Wage Dispersion in a Partially Unionized Labor Force (2009)
Working Paper: Wage Dispersion in a Partially Unionized Labor Force (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:gmf:wpaper:2009-09

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