Working Paper: NBER ID: w9473
Authors: David Card; Thomas Lemieux; W. Craig Riddell
Abstract: This paper presents a comparative analysis of the link between unionization and wage inequality in the U.S., the U.K., and Canada. Our main motivation is to see whether unionization can account for differences and trends in wage inequality in industrialized countries. We focus on the U.S., the U.K., and Canada because the institutional arrangements governing unionization and collective bargaining are relatively similar in these three countries. The three countries also share large non-union sectors that can be used as a comparison group for the union sector. Using comparable micro data for the last two decades, we find that unions have remarkably similar qualitative impacts in all three countries. In particular, unions tend to systematically reduce wage inequality among men, but have little impact on wage inequality for women. We conclude that unionization helps explain a sizable share of cross-country differences in male wage inequality among the three countries. We also conclude that de-unionization explains a substantial part of the growth in male wage inequality in the U.K. and the U.S. since the early 1980s.
Keywords: No keywords provided
JEL Codes: J3; J5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| unionization (J50) | wage inequality (J31) |
| unionization (men) (J51) | wage inequality (men) (J31) |
| unionization (women) (J51) | wage inequality (women) (J31) |
| deunionization (J51) | increase in male wage inequality (J31) |
| decline in unionization rates (UK) (J50) | difference in trends of male wage inequality (UK vs US) (J31) |
| union status (J51) | variance of wages in nonunion sector (J31) |