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Union wage premiums in Great Britain: Coverage or membership?

Authors
Journal
Labour Economics
0927-5371
Publisher
Elsevier
Publication Date
Volume
14
Issue
1
Identifiers
DOI: 10.1016/j.labeco.2004.12.001
Keywords
  • Union Wage Premium
  • Coverage
  • Membership

Abstract

Abstract This paper presents estimates of union wage premiums for Great Britain and distinguishes between union membership and union coverage effects on wages. For this purpose a panel data system estimator is applied to data from the British Household Panel Survey. For female workers a coverage premium of 6.1% is estimated whilst no evidence of a union membership premium is found. This result lends support to the by-product theory of Olson (1965) [Olson Jr., M., 1965. The logic of collective action. Harvard University Press, Cambridge (Mass.)]: if female covered members receive other private benefits than a higher wage from the union the coverage premium could be viewed as a by-product. For male workers no evidence is found of a membership premium nor a coverage premium. To investigate potential bias in the estimated union effects particular attention is paid to measurement error in union membership and the inclusion of job-changes in the sample.

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