Four papers on wage formation in a unionized economy (original) (raw)

The Impact of Union Status on Wages

Among other factors such as the employer’s willingness and ability to pay employees, as well as the employee’s acceptance rate, the important institutional role played by labour organizations has been identified through existing empirical literature. This paper estimates the impact of union status on wages, while looking to other possible factors of wage determination, specifically, educational attainment levels and the province of residence. The results suggest that union status has a positive effect on wages, and that this effect is both economically and statistically significant. This effect holds even when accounting for educational attainment and province of residence. In addition, the findings also suggest that there is a positive relationship between educational attainment and wage. It is important to note that there are potential issues of endogeneity, such as with unionization itself, as well as omitted variable bias, as it is difficult to include or measure all the possible factors of the union wage effect.