What Explains Wage Differences between Union Members and Covered Nonmembers?

Schumacher, Edward J.

doi:10.2307/1060811

Cited by 31 publications

(24 citation statements)

References 17 publications

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“…The difference is basically driven by data availability and there is no discussion of conceptual differences. In Schumacher's (1999) analysis the share of free-riders erodes union power and results in lower wages. Stewart (1987) reckons that wage premia for closed shop regulations as extreme cases of union membership premia may differ depending on the institutional settings in which the bargaining takes place.…”

Section: Effects Of Membership or Coverage?mentioning

confidence: 99%

Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany

Fitzenberger

Kohn²,

Lembcke³

2013

ILR Review

112

103

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Collective bargaining in Germany takes place either at the industry level or at the firm level; collective bargaining coverage is much higher than union density; and not all employees in a covered firm are necessarily covered. This institutional setup suggests to distinguish explicitly union power as measured by net union density (NUD) in a labor market segment, coverage at the firm level, and coverage at the individual level. Using linked employer-employee data and applying quantile regressions, this is the first empirical paper which simultaneously analyzes these three dimensions of union influence on the structure of wages. Ceteris paribus, a higher share of employees in a firm covered by industry-wide or firm-level contracts is associated with higher wages. Yet, individual bargaining coverage in a covered firm shows a negative impact both on the wage level and on wage dispersion. A higher union density is negative at all points in the wage distribution for uncovered employees. In line with an insurance motive, higher union density compresses the wage structure and, at the same time, it is associated with a uniform leftward movement of the distribution for uncovered employees.

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Section: Effects Of Membership or Coverage?mentioning

confidence: 99%

Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany

Fitzenberger

Kohn²,

Lembcke³

2013

ILR Review

112

103

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“…In exchange, they are entitled to benefits such as strike pay, advice on job-related affairs and support in legal conflicts with the employer. In contrast to countries like the United States or the United Kingdom (Schumacher 1999, Budd and Na 2000, Eren 2009, Hildreth 2000, union members in Germany do not obtain higher wages (cf. Schmidt and Zimmermann 1991, Fitzenberger, Ernst and Haggeney 1999, and Goerke and Pannenberg 2004.…”

Section: Institutional Backgroundmentioning

confidence: 99%

Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform

Goerke

Pannenberg

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In 1996, statutory sick pay was reduced for private sector workers in Germany. Using the empirical observation that trade union members are dismissed less often than non-members, we construct a model to predict how absence behaviour will respond to the sick pay reform. Terms of use: Documents inWe show that union members may have stronger incentives to be absent and to react to the cut in sick pay. In the empirical investigation, we find a positive relationship between trade union membership and absence due to sickness and observe more pronounced reactions to the cut in sick pay among union members than among non-members. These findings suggest that more flexibility in the use of paid absence due to sickness constitutes a private gain from trade union membership.JEL-Code: I180, J510, J220.Keywords: difference-in-differences, sickness-related absence, Socio-Economic Panel (SOEP), statutory sick pay, trade union membership. We are grateful to Nicolas Ziebarth for helpful comments and for providing background information on industry-specific bargaining contracts. Also, special thanks to Laszlo Goerke

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“…industrial peace as opposed to moderating wage increases, and hence improving the country s competitiveness (see also Bradley et al, 1991 From a wider international perspective, while there is a great deal of literature relating to trade union effects on earnings, both in the context of a wage premium (Freeman & Medoff (1981), Lewis (1986), Stewart (1987), Schumacher (1999), Forth & Millward (2002)) and wage dispersion (Freeman (1982), Blau & Kahn (1996) DiNardo et al (1996, Card et al (2003), Dustmann & Schönberg (2004)), much less is known with respect to the impact of bargaining regimes on firm-level wage dispersion and even less on measures of firm competitiveness 9 . Existing evidence is mostly restricted to European countries, presumably due both to the absence of such institutional arrangements elsewhere in the world and/or a lack of available data.…”

Section: Context and Literaturementioning

confidence: 99%

The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

McGuinness¹,

Kelly²,

O’Connell³

2010

Industrial Relations

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This paper uses a linked employer-employee dataset to analyse the impact of institutional wage bargaining regimes on levels of average labour costs and within firm wage dispersion in private sector companies in Ireland. The results show that while centralised bargaining reduced labour costs within both the indigenous and foreign-owned sectors, the relative advantage was greater among foreign-owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that choose to locate in countries implementing a centralised bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within firm wage inequality.

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What Explains Wage Differences between Union Members and Covered Nonmembers?

Cited by 31 publications

References 17 publications

Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany

Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany

Trade Union Membership and Sickness Absence: Evidence from a Sick Pay Reform

The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

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