NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Union Threat Effects and Nonunion Industry Wage Differentials

David Neumark, Michael L. Wachter

NBER Working Paper No. 4046
Issued in April 1992
NBER Program(s):   LS

We investigate the impact of union strength on changes in nonunion wages and employment. The prevailing model in this area is the threat model, which predicts that increases in union strength cause increases in nonunion wages and decreases in nonunion employment. In testing the threat model, we are also testing two alternatives, the crowding and complements models. In contrast to the prediction of the threat model, decreases in the percent organized (reflecting a declining union threat) are associated with increases in the nonunion wage. Furthermore, increases in union wages appear to decrease, rather than to increase, nonunion wages. Evidence on the determinants of intra-industry variation in nonunion wage premia is somewhat more consistent with the crowding model and is strikingly consistent with the complements model of union and nonunion wage determination. Further evidence on the determinants of intra-industry variation in nonunion employment is consistent with the complements model and the threat model; movements in nonunion industry employment are negatively related to changes in proxies for union strength. Thus, the combined evidence supports the complements model, but neither the threat model nor the crowding model.

download in pdf format
   (351 K)

email paper

This paper is available as PDF (351 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4046

Published: Neumark, David and Michael L. Wachter. "Union Effects Of Nonunion Wages: Evidence From Panel Data On Industries And Cities," International Labor Relations Review, 1995, v49(1), 20-38.

Users who downloaded this paper also downloaded these:
Farber w9705 Nonunion Wage Rates and the Threat of Unionization
Dickens w1856 Wages, Employment and the Threat of Collective Action by Workers
Dickens and Katz w2271 Inter-Industry Wage Differences and Theories of Wage Determination
Blanchflower and Bryson w9395 Changes over time in union relative wage effects in the UK and the US revisited
Card, Lemieux, and Riddell w9473 Unionization and Wage Inequality: A Comparative Study of the U.S, the U.K., and Canada
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us