Unions and wage determination : three essays

Thesis (Ph. D.)--University of Hawaii at Manoa, 1991.Includes bibliographical references (leaves 127-134).Microfiche.ix, 134 leaves, bound 29 cmsince the pioneering work by Lewis (1963), U.S. studies of unionism have concerned not only with what unions do for organized labor but also with what they do for unorganized labor. The main purpose of this study is to determine whether unions have a significant impact on nonunion wage determination. This paper is composed of three essays. In the first essay, we have focused on whether union/nonunion wage spillovers exist and in which direction they run using time-series data. The empirical results suggest that union wage behavior spills over into nonunion wages and vice versa, that is, feedback relationship exists between the union and nonunion sector. Therefore, the hypothesis that nonunion wages are determined solely by market forces is rejected. The second essay addresses the effects of the extent of union organization on the wages of union and nonunion workers using cross-section, individual-worker data. The empirical results demonstrate that geographic area (SMSA) union density has a positive and significant effect not only on union wages but also on nonunion wages while industry union density has a positive impact only on union wages. These results imply that the threat effect for the nonunion sector is determined by area-wide unionism rather than nation-wide industry unionism, and hence the existence of the union-to-nonunion spillover effect is also supported, in part, by the cross-section data. On the other hand, some authors have sought to take account of the reverse causality from wage rates to unionism. The endogeneity of union status in wage determination is investigated in the third essay. The empirical results show that the worker's predicted wage differential has a strong positive impact on the likelihood of union membership. This finding does not refute the hypothesis of the endogeneity of union status in wage determination. To summarize, the role of unions in wage determination is not negligible, but unionism is not independent of the market mechanism