Working Paper: NBER ID: w2755
Authors: Joseph Tracy
Abstract: A stylized fact in the growing literature on public sector labor markets is that estimates of public sector union wage premia are significantly lower than estimates of private sector union wage premia. In this paper I investigate the hypothesis that this difference may in part be due to the differing legal environments in which public and private sector unions operate. Using data from the Current Population Survey and the Census of Population, I find that public sector union wage differentials increase significantly with the degree of legal protection afforded to the union in bargaining. However, the estimated public sector union wage premia when no legal controls are included in the specification are close to the estimated premia under the strongest legal environment. Consequently, while controlling for the legal environment in the public Sector is important, it may not reconcile the differences between estimated public and private sector union wage premia.
Keywords: union wage differentials; public sector; private sector; legal environment
JEL Codes: J51; J52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| legal protections (K16) | public sector union wage differentials (J45) |
| duty-to-bargain laws (J52) | union wage differentials (J31) |
| prohibitions against collective bargaining (J58) | union wage premiums (J31) |
| legal environment (K20) | public sector union wage differentials (J45) |
| legal protections (K16) | nonunion wages (J39) |