Wage Loss Following Displacement: The Role of Union Coverage

Industrial and Labor Relations Review, April 1998

Posted: 3 Feb 1998

See all articles by Peter Kuhn

Peter Kuhn

University of California, Santa Barbara (UCSB) - Department of Economics; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Arthur Sweetman

McMaster University - Department of Economics; McMaster University - Centre for Health Economics and Policy Analysis (CHEPA); IZA Institute of Labor Economics

Abstract

Using two Canadian data sets, the authors explore the role of union coverage in displaced workers' wage losses. While only 32% of the workers had unionized jobs prior to displacement, the wage loss suffered by these workers represented about 80% of the wages lost by all displaced workers in both samples. Losing union status was associated with large losses whether or not a worker switched industries after displacement. Extrapolating the results to the United States, the authors estimate that one-third to one-half of U.S. displaced workers' wage losses may be due purely to the loss of union coverage.

JEL Classification: J31, J51

Suggested Citation

Kuhn, Peter J. and Sweetman, Arthur, Wage Loss Following Displacement: The Role of Union Coverage. Industrial and Labor Relations Review, April 1998. Available at SSRN: https://ssrn.com/abstract=56488

Peter J. Kuhn (Contact Author)

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

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IZA Institute of Labor Economics

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National Bureau of Economic Research (NBER)

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Arthur Sweetman

McMaster University - Department of Economics ( email )

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McMaster University - Centre for Health Economics and Policy Analysis (CHEPA) ( email )

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Hamilton, ON L8S 4M4
Canada

IZA Institute of Labor Economics

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Germany

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