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

53 Pages Posted: 27 Jan 2021 Last revised: 14 Jul 2022

See all articles by Nicole M. Fortin

Nicole M. Fortin

University of British Columbia (UBC) - Department of Economics

Thomas Lemieux

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Neil Lloyd

University of British Columbia (UBC)

Date Written: January 2021

Abstract

This paper examines the role of spillover effects of minimum wages and threat effects of unionization in changes in wage inequality in the United States between 1979 and 2017. A distribution regression framework is introduced to estimate both types of spillover effects. Threat effects double the contribution of de-unionization to the increase in male wage inequality. Spillover effects magnify the explanatory power of declining minimum wages to two-thirds of the increase in inequality at the bottom end of the female wage distribution.

Suggested Citation

Fortin, Nicole M. and Lemieux, Thomas and Lloyd, Neil, Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects (January 2021). NBER Working Paper No. w28375, Available at SSRN: https://ssrn.com/abstract=3772614

Nicole M. Fortin (Contact Author)

University of British Columbia (UBC) - Department of Economics ( email )

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Thomas Lemieux

University of British Columbia (UBC) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Neil Lloyd

University of British Columbia (UBC) ( email )

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