Public Sector Earnings and the Extent of Unionization

Abstract

Many studies have examined the influence of union density (union members as a percentage of all workers) on earnings in the private sector, but few such studies have looked at the public sector. Using data from the 1991 Current Population Survey, this study estimates the determinants of earnings for state and local government employees in both the union and non-union sectors. The extent of public sector unionization appears to be positively correlated with earnings for both state and local government workers and for those covered and not covered by collective agreements. Although the effect for non-covered employees is smaller than that for covered employees, both effects are larger than those typically found in similar estimates for the private sector. The authors also find that legal structure has some influence on earnings, with the most consistent effect being a positive influence of arbitration on the earnings of local government workers.

JEL Classification: J51, J52, J45