Bargaining Effect and Membership Effect in Public Sector Unions

Abstract

The vast majority of the literature on public sector unionism focuses on union wage effects and the extent of unionization. In this paper we investigate some additional aspects of public sector unionism that have been discussed recently with respect to the private sector. The first is an analysis of the wage effects attributable to the legal status of the worker/union. Specifically, we investigate the difference between an individual's membership in a union and an individual's employment in a collective bargaining unit. Second, we examine the return to human capital and seniority in unionized versus non-unionized public sector employment. The two issues under scrutiny here are not unrelated for each measures in its own way the ability of the union to deliver benefits to, and elicit the support of, its membership. In other words, both are issues of union security. For the most part, the literature on union wage effects makes no distinction between union membership and collective bargaining coverage. As an exception, Christensen and Maki use a cross-section of three-digit industries to investigate both an industry coverage variable and an industry membership variable [3]. They conclude that membership in the union is the key status in the collective bargaining process. In two other papers, Jones [15] and Blakemore, Hunt and Kiker, [1] use panel data that allow the worker's union status to be identified according to union membership and collective bargaining coverage. Both find that nonunion workers employed in a collective bargaining unit receive a wage premium over workers who are not covered, and that union members receive an extra bonus.