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The Sources of the Union Wage Gap: The Role of Worker, Firm, Match, and Jobtitle Heterogeneity

John Addison (), Pedro Portugal and Hugo de Almeida Vilares ()

No 7392, CESifo Working Paper Series from CESifo Group Munich

Abstract: Using matched employer-employee-contract data for Portugal – a country with near-universal union coverage – we find evidence of a sizable effect of union affiliation on wages. Gelbach's (2016) decomposition procedure is next deployed to ascertain the contributions of worker, firm, match, and job-title heterogeneity to the union wage gap. Of these the most important is the firm fixed effect, followed at some distance by union workers gaining from elevated job titles and/or more generous promotion policies. For its part, unobserved worker quality plays only a very weak role, while there is even less suggestion that improved match quality bolsters the union premium.

JEL-codes: J31 J33 J41 J51 J52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-lma and nep-ltv
Date: 2018
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Handle: RePEc:ces:ceswps:_7392