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Deunionization and Pay Inequality in OECD Countries: A Panel Granger Causality Approach

Unal Tongur () and Adem Elveren ()

No 1306, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: The impact of unionization on wage inequality has been examined by a vast literature. Focusing mostly on the US and the UK in time series analyses or on OECD countries in panel data analyses, a bulk of these studies have found a negative impact of deunionization (i.e. decline in the union density rate) on distribution of wages. By utilizing two inequality data sets both provided by the University of Texas Inequality Project this paper contributes to the literature, analyzing the causality relationship between deunionization and pay inequality for 24 OECD countries for the 1963-2000 period within a panel Granger structure. Our findings show not only that there is causality from union density to income inequality but also, perhaps more importantly, point out that there is causality running from income inequality to union density for various set of countries and time periods.

Keywords: Union membership; Pay Inequality; Income Inequality; Panel Granger (search for similar items in EconPapers)
JEL-codes: C33 J31 J51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab, nep-lma and nep-pbe
Date: 2013-05, Revised 2013-05
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http://www.erc.metu.edu.tr/menu/series13/1306.pdf First version, 2013 (application/pdf)

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Journal Article: Deunionization and pay inequality in OECD Countries: A panel Granger causality approach (2014) Downloads
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