Changes in the Union Wage Premium by Industry
Relying on CPS data, we compute estimates of the union wage premium, conditional on worker characteristics, for 32 private-sector industries over the period 1971-99. The dispersion of union premiums across industries has narrowed over time as high premiums have tended to fall and low premiums rise. At the aggregate level, the premium has drifted lower. When we model the union premium as a function of cyclical and structural variables and unmeasured industry characteristics, we find that COLA clauses reduce the cyclicality of the union premium and that increases in import penetration are strongly associated with rising union premiums. The effect of deregulation is mixed.
Bratsberg, Bernt, and James F. Ragan, Jr.