Union Wage Effects in the Presence of Enterprise Bargaining

Abstract

Previous research on union wage effects has underestimated the potential for unions to raise member wages since the data used do not enable differences across bargaining units to be properly accounted for. This study addresses this deficiency by utilizing matched employer–employee data that permit workplace‐specific union wage effects to be identified. Results from the estimation of wage equations indicate that, while there is only a very small intra‐workplace union wage effect, differences across workplaces are considerable. This differential, however, only exists at workplaces where there is substantial coverage by collective agreements.