The Sources of the Union Wage Gap: The Role of Worker, Firm, Match, and Job-title Heterogeneity

46 Pages Posted: 21 Feb 2019

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Pedro Portugal

Bank of Portugal - Research Department; New University of Lisbon; IZA Institute of Labor Economics

Hugo Vilares

Bank of Portugal

Date Written: 2018

Abstract

Using matched employer-employee-contract data for Portugal – a country with near-universal union coverage – we find evidence of a sizable effect of union affiliation on wages. Gelbach's (2016) decomposition procedure is next deployed to ascertain the contributions of worker, firm, match, and job-title heterogeneity to the union wage gap. Of these the most important is the firm fixed effect, followed at some distance by union workers gaining from elevated job titles and/or more generous promotion policies. For its part, unobserved worker quality plays only a very weak role, while there is even less suggestion that improved match quality bolsters the union premium.

Keywords: union density, union wage gap, worker/form/job-title fixed effects, match quality, Gelbach decomposition, Portugal

JEL Classification: J310, J330, J410, J510, J520

Suggested Citation

Addison, John T. and Portugal, Pedro and Vilares, Hugo, The Sources of the Union Wage Gap: The Role of Worker, Firm, Match, and Job-title Heterogeneity (2018). CESifo Working Paper No. 7392. Available at SSRN: https://ssrn.com/abstract=3338746

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Pedro Portugal

Bank of Portugal - Research Department ( email )

Av. Almirante Reis 71, 6th
Lisbon 1150-012
Portugal
+351 21 313 0000 (Phone)
+351 21 814 3841 (Fax)

New University of Lisbon

Lisbon, 1099-085
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hugo Vilares

Bank of Portugal ( email )

Rua Francisco Ribeiro, 2
Lisbon, 1150-165
Portugal

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