Abstract
As has long been recognized in the literature, questions about the effects of unions on wages may be conveniently grouped under two headings, which, following Lewis (1983), I shall refer to as wage gaps and wage gains. The wage gap refers to the difference between the pay a worker would receive were he represented by a union in collective bargaining and the pay he would receive were he not so represented. The wage refers to the difference between the pay a worker actually receives and the pay he would receive in the absence of any unionization. (When negative, as might be the case for a worker who is not represented by a union, the wage gain may actually be a wage loss.) It has generally been agreed that it is not possible to measure union wage gains, and a host of empirical studies attest to a consensus that measurement of the wage gap, while not impossible, is certainly difficult. Estimating the wage gap is particularly difficult in analyses that use aggregate (e.g., industry or occupation) cross-section data: such data typically do not contain measures of the average wage paid to unionized or nonunionized workers (Wu and W, respectively) considered separately.' The most obvious solution to this problem is to obtain aggregate data in which measures of both Wft and W, are available. In the present paper, I analyze union wage effects using just such a data set. The main point of interest that emerges from the analysis is that, contrary to what seems to be a general consensus, it is indeed possible albeit with some stringent identifying assumptions to estimate union wage gains as well as union wage gaps.
Published Version
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