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Sources of the Union Wage Gap: Results from High-Dimensional Fixed Effects Regression Models

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

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We estimate the impact of union density on wages using matched employer-employee contract data for Portugal. We extend omitted variable bias decomposition procedure of Gelbach (2016) to obtain the contribution of worker, firm, and job-title heterogeneity to the union wage premium. The principal result is the dominance of the allocation or workers among firms with different wage policies. The unobserved skills of union workers have a modest impact on wages; unions do not place their members into higher job-titles along the job career hierarchy; the wage cushion enables firms to partially undo the bargained wage; and, while fringes matter, matching does not.

JEL-codes: J31 J33 J41 J51 J52 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-eur and nep-ltv
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Working Paper: Sources of the Union Wage Gap: Results from High-Dimensional Fixed Effects Regression Models (2017) Downloads
Working Paper: Sources of the Union Wage Gap: Results from High-Dimensional Fixed Effects Regression Models (2015) Downloads
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