The Role of Labor Unions in Immigrant Integration

Samuel Dodini, Alexander Willén () and Julia Li Zhu ()
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Julia Li Zhu: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway, https://www.julializhu.com/

No 24/2023, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: We examine if unions narrow or widen labor market gaps between natives and immigrants. We do so by combining rich Norwegian employer-employee matched register data with exogenous variation in union membership obtained through national government policies that differentially shifted the cost to workers to join a union. While union membership significantly improves the wages of natives, its positive effects diminish substantially for Western immigrants and disappear almost entirely for non-Western immigrants. The effect of unions on native wages, and the role of unions in augmenting the native-immigrant wage gap, is nonexistent in competitive labor markets while it is substantial in markets characterized by a high degree of labor concentration. This implies that unions act as a countervailing force to employer power in imperfect markets and can ameliorate the negative labor market effects of labor market concentration, but only for natives. Using unions as a means to empower workers and solve market failures caused by imperfect competition in the labor market, therefore, is likely to lead to a significant increase in societal inequality.

Keywords: Unions; Migration; Inequality (search for similar items in EconPapers)
JEL-codes: J10 J50 J60 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2023-12-22
New Economics Papers: this item is included in nep-int, nep-lab, nep-ltv, nep-mig and nep-ure
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Citations: View citations in EconPapers (1)

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