The Impact of Workers’ Collective Voice on Union and Nonunion Wages: Theory and Evidence from Japan

Hiroyuki Nishiyama (), Mina Nakano (), Manabu Furuta () and Mizuki Tsuboi ()
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Hiroyuki Nishiyama: University of Hyogo
Mina Nakano: University of Hyogo
Manabu Furuta: Graduate School of Economics, Kobe University
Mizuki Tsuboi: University of Hyogo

No 2605, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We examine how workers’ collective voice affects union and nonunion wages both theoretically and empirically. We develop a simple union model with a social insurance system and show that, due to two counteracting forces in bargaining, higher bargaining power raises both union and nonunion wages when ex-ante bargaining power is low but lowers them when it is sufficiently high. Using Japanese household-level data, we document an inverted U-shaped relationship between bargaining power and wages for both groups. Applying entropy balancing, we confirm that union wages are maximized at about 70 percent bargaining power, compared with 44 percent for nonunion wages. Given Japan’s current level of about 25 percent, stronger bargaining power and a rising societal willingness to improve working conditions are likely to benefit union members and also nonunion members once under union coverage.

Keywords: Collective Voice; Union Wages; Nonunion Wages; Bargaining Power; Japan (search for similar items in EconPapers)
JEL-codes: J31 J51 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2026-03
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