The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements

Posted: 12 Oct 1999

See all articles by John W. Budd

John W. Budd

University of Minnesota - Twin Cities - Carlson School of Management

In-Gang Na

Korea Energy Economics Institute - Energy Modelling Research Division

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Abstract

Using Current Population Survey data for 1983 to 1993, this paper analyzes whether there is a union membership wage premium among full-time, private sector employees covered by union contracts. OLS estimates of the membership wage premium are 12-14 percent, and allowing membership to be endogenous yields larger estimates. Differences in job tenure, unobservable characteristics, and measurement error cannot fully explain the estimated premium. Significant differences in this premium, as well as in membership rates conditional upon coverage, across various demographic subgroups are also documented. In general, "free riders" do not appear to be free riding.

JEL Classification: J31, J51

Suggested Citation

Budd, John W. and Na, In-Gang, The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements. Journal of Labor Economics. Available at SSRN: https://ssrn.com/abstract=182608

John W. Budd (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

321 19th Avenue South
Center for Human Resources and Labor Studies
Minneapolis, MN 55455
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HOME PAGE: http://www.johnwbudd.com

In-Gang Na

Korea Energy Economics Institute - Energy Modelling Research Division ( email )

665-1, Naeson-Dong, Euiwang-Si
Kyunggi-Do, 437-082
Korea

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