Abstract
Empirical results based on pooled male data from the Panel Survey of Income Dynamics indicate an overall union wage premium of about 11.92 percent for the 1980s. In response to fluctuations in local labor market conditions, proxied by the local unemployment rate, a much more flexible wage-setting process is found in the nonunion sector relative to the union sector. The long-term effect of unemployment on nonunion real wages suggests an approximate 0.6 percent decline for every one percentage point increase in unemployment, a statistically significant reduction, but the long-term effect of unemployment on real wages of union members is negligible. The union wage premium ranges between 11.6 to 12.3 percent for the sample years. Even though union wages are insensitive to short-run fluctuations in local labor market conditions, and are somewhat countercyclical in nature, widespread union wage concessions which occurred during the 1980s may now be exerting a downward pressure on union wages.
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We acknowledge financial support of National Science Foundation [OSR-9350540], the Ada Howe Kent Research Fund, and The Fogelman Academic Research Excellence Fund. We thank Barbara Ganley for valuable editorial comments and Noga Peled for her able research assistance. The usual caveat applies.
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Wunnava, P.V., Okunade, A.A. Countercyclical union wage premium? Evidence for the 1980s. Journal of Labor Research 17, 289–296 (1996). https://doi.org/10.1007/BF02685846
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DOI: https://doi.org/10.1007/BF02685846