Estimating union wage effects and the probability of union membership in the U.K. during 1991-2003

Georgios Chrysanthou

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: Using a dynamic model of unionism and wage determination we find that the unobserved factors that influence union membership also affect wages. We observe a significant decline in trade union membership persistence during the period under analysis. We find that UK trade unions still play a nonnegligible, albeit diminishing, role in wage formation. While unions were unable to establish a wage premium for male members during the two periods considered, the female union wage effect stood at (19.4%, 17.6%) during (1991-1996, 1997-2002) respectively. The endogeneity correction procedure employed yields a discernible pattern of the union wage effect relative to OLS and fixed effects thus, refuting the pessimistic conclusions reached by Freeman and Medoff (1982) and Lewis (1986) that endogeneity correction methodologies do not contribute to our understanding of the union wage effect puzzle

Keywords: Union; membership; persistence; Union; wage; effects; Unobserved; heterogeneity; Dynamic; model; of; unionism; and; wage; determination (search for similar items in EconPapers)
JEL-codes: C31 C33 J31 J51 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-bec and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we1014

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