Unions, Wages, and Skills

Abstract

Studies uniformly conclude that union wage effects are largest for workers with low measured skills. Longitudinal analysis using 1989/90-1994/95 CPS matched panels produces union premium estimates equivalent across skill groups, following appropriate sample restrictions and control for worker-specific skills. NLSY evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills. Differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization, union organizing where skills are homogeneous, and unionized employers' reluctance to hire the most as well as least able workers.

Match Bias in Wage Gap Estimates Due to Earnings Imputation

“…Imputation can either mitigate or exacerbate measurement error bias toward zero resulting from misclassified union status, depending on whether or not imputed earners with misclassified union status are matched to an earnings donor with the same measured union status. Longitudinal studies that examine misclassification bias in union status include Freeman (1984), Card (1996), and Hirsch and Schumacher (1998). 10 We thank Thomas Lemieux and Chris Bollinger for providing this insight, along with guidance on the appropriate literature.…”

“…Absent information on hours worked, observations are dropped. 19 Ignored are issues such as specification, the endogeneity of union status, differences between nonmember covered and not covered, unmeasured worker and job attributes, and employer-employee selection on skills and tastes (e.g., Card 1996;Hirsch and Schumacher 1998). 20 In an earlier version of this article, prior to our identifying nonrespondents in 1989-93 (see n. 16), "corrected" regression estimates for 1989-93 were obtained by adjusting upward the "not corrected" gap estimates by .031 log points, the 1983-88 average difference between estimates including and excluding allocated earners.…”

“…These authors have been careful to delete allocated earners from their analysis. Hirsch and Schumacher (1998) omit allocated earners, noting the possible mismatch between the union status of workers and donors. Hirsch and Macpherson (2000, appendix), find that wage differential estimates among air transport workers, particularly pilots, are sensitive to treatment of allocated earners.…”

The Influence of Retiree Health Benefits on Retirement Patterns

“…First, we follow Hirsch and Schumacher's (1998) sample restriction approach, which involves narrowing the sample to observations in which responses are likely to be accurate, then checking whether the findings differ from those obtained with the full sample. Second, we make use of econometric bounding techniques developed to appraise the seriousness of measurement error.…”

Private sector union density and the wage premium: Past, present, and future

“…Log differentials can be converted to (approximate) percentages by [exp(d)-l] 100, where d is the log differential. We ignore problems with respect to the estimation of union premiums, such as specification, the endogeneity of union status, unmeasured worker and job attributes, and employer-employee selection on skills and preferences (Card, 1996;Hirsch and Schumacher, 1998). …”