Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects

Fortin, Nicole M.; Lemieux, Thomas; Lloyd, Neil

doi:10.1086/712923

Cited by 44 publications

(21 citation statements)

References 42 publications

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“…Over this full period, the two components together imply that de-unionisation can account for 37.6% of the total decline in the mean wage over that period. This is similar to Fortin et al (2021)'s finding that taking account of spillovers roughly doubles the estimated 'shift-share' impact of de-unionisation on wage inequality over the 1979-2017 period (though, in our case, it much more than doubles it). Our results focus on wage levels rather than inequality and provide 39 For union wages, we use equation ( 6), the fact that the coefficient on the E u ic term in the full specification equals γ u 1 according the theory, and an assumption that γ u 2 = γ n 2 .…”

Section: Observedsupporting

confidence: 90%

“…Other papers in this literature include an important contribution byDiNardo et al (1996), who introduce a semi-parametric re-weighting technique building on the work ofOaxaca (1973) which attributes 14% of the increase in wage inequality over1979-1988 (for men) to declining unionisation. Extensions of this work are found in DiNardo andLemieux (1997) andFortin et al (2021). Further studies byCard (2001), Card…”

mentioning

confidence: 54%

“…In a recent paper, Fortin et al (2021) estimate the role played by union threat effects using variation in the unionisation rate at the industry×state level included as an additional covariate in their distribution regression approach. They find positive effects of the unionisation rate operating primarily at the part of the wage distribution just below the median and their counterfactual exercise indicates that spillovers double the measured impact of deunionisation in increasing wage inequality in the US.…”

Section: Introductionmentioning

confidence: 99%

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The impact of unions on nonunion wage setting: threats and bargaining

Green¹,

Sand²,

Snoddy³

2022

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In this paper we provide new estimates of the impact of unions on nonunion wage setting. We allow the presence of unions to affect nonunion wages both through the typically discussed channel of nonunion firms emulating union wages in order to fend off the threat of unionisation and through a bargaining channel in which nonunion workers use the presence of union jobs as part of their outside option. We specify these channels in a search and bargaining model that includes union formation and, in our most complete model, the possibility of nonunion firm responses to the threat of unionisation. Our results indicate an important role played by union wage spillovers in lowering wages over the 1980-2010 period. We find de-unionisation can account for 38% of the decline in the mean hourly wage between 1980 and 2010, with two-thirds of that effect being due to spillovers. Both the traditional threat and bargaining channels are operational, with the bargaining channel being more important. * We are grateful to Thomas Lemieux, Craig Riddell, and Raffaele Saggio for comments. We also greatly benefited from comments from participants at seminars at the

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Section: Observedsupporting

confidence: 90%

mentioning

confidence: 54%

Section: Introductionmentioning

confidence: 99%

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The impact of unions on nonunion wage setting: threats and bargaining

Green¹,

Sand²,

Snoddy³

2022

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“…While similar to the study in ref. 54 of the effect of minimum wages, our approach differs in two key ways. First, we follow ref.…”

Section: Methodsmentioning

confidence: 99%

Rapid wage growth at the bottom has offset rising US inequality

Aeppli

Wilmers

2022

Proc. Natl. Acad. Sci. U.S.A.

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US earnings inequality has not increased in the last decade. This marks the first sustained reversal of rising earnings inequality since 1980. We document this shift across eight data sources using worker surveys, employer-reported data, and administrative data. The reversal is due to a shrinking gap between low-wage and median-wage workers. In contrast, the gap between top and median workers has persisted. Rising pay for low-wage workers is not mainly due to the changing composition of workers or jobs, minimum wage increases, or workplace-specific sources of inequality. Instead, it is due to broadly rising pay in low-wage occupations, which has particularly benefited workers in tightening labor markets. Rebounding post–Great Recession labor demand at the bottom offset enduring drivers of inequality.

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“…As telework has become a salient aspect of many jobs, the presence of a union is likely to be related to the extent of the adoption of remote work. Labor unions have effects not only for their immediate members but also have substantial spillover effects for non-union workers who are within the same firm, region, and industry (Fortin, Lemieux, and Lloyd 2021). While unions are likely to have an effect, the direction is not clear cut, as unions may seek to facilitate their members' preferences for remote work, but might also have interests in maintaining strong local 8 See https://www.bls.gov/news.release/pdf/union2.pdf and https://www.bls.gov/cps/aa2020/cpsaat52.htm.…”

Section: Bodiesmentioning

confidence: 99%