the effect of unionism on workers valuation of future pension benefits this paper investigates the impact of unionism on the pension benefits workers expect to receive on retirement the valuation of future benefits by workers rather than actual employer expenditures on pensions is examined because expected benefits should be the more important variable in explaining the labor market behavior of individual workers analysis of data for middle aged men taken from the national longitudinal surveys suggests that union workers are more knowledgeable than nonunion workers about their retirement benefits and also the average union worker expects to receive a pension higher than that expected by the average nonunion worker more specifically among firms providing pensions the expected benefits are actually lower in union firms than in nonunion firms but that difference is outweighed by the fact that nonunion firms are much more likely than union firms to have no pension plan at all

trends in male earnings inequality this study uses newly available time series data on the u s earnings distribution to analyze trends in male earnings inequality between 1958 and 1977 the major finding is that the observed slow upward trend in earnings inequality is well explained by a small number of plausible economic factors the paper has four parts part ii briefly reviews related time series research on both earnings and income inequality male earnings inequality is considered from the human capital perspective in section iii and from a less structured approach in section iv the last section is a summary and conclusion

a model of product line design and introduction sequence with reservation utility abstract cannibalization is a major concern for a firm when designing a product line in addition external options from outside the firm s product line may also play a significant role in this paper we investigate the impact of external options represented by reservation utility on product line design and introduction sequence we find that a heterogeneous reservation utility defines the relative attractiveness of segments and corresponding product line b reservation utility makes it more favorable to introduce products sequentially rather than simultaneously c aggregating segments is an effective way to mitigate cannibalization when it becomes too difficult to manage with different values of reservation utility across multiple segments and d introducing products in a non monotone order of quality can improve profit from simultaneous introduction when the value of reservation utility of a middle segment is particularly high

does marriage really make men more productive this paper presents new descriptive evidence regarding marital pay premiums earned by white males longitudinal data indicate that wages rise after marriage and that cross sectional marriage premiums appear to result from a steepening of the earnings profile data from a company personnelfile that includes information on job grades and supervisor performance ratings reveal large marital status pay differences within a narrow range of occupations managers and professionals and environments a single firm married workers tend to be located in higher paying job grades there are very small pay differentials within grades married men receive higher performance ratings than single men as a result they are much more likely to be promoted controlling for rated performance however eliminates the promotion differential sanders korenman is an assistant professor of economics and public affairs at princeton university and is a faculty associate of the office of population research at princeton university and a research affiliate of the national bureau of economic research nber david neumark is an assistant professor of economics at the university of pennsylvania and a research affiliate of the nber korenman wishes to acknowledge the hewlett foundation and the harvard university center for population studies for financial support the authors are grateful to james medofffor making available an extract from the company personnelfile questions regarding data availability should be directed to professor james

organized labor and racial wage inequality in the united states why have african american private sector unionization rates surpassed those of white workers for decades and how has private sector union decline exacerbated black white wage inequality using data from the current population survey 1973 2007 the authors show that african americans join unions for protection against discriminatory treatment in nonunion sectors a model predicted wage series also shows that among women black white weekly wage gaps would be between 13 and 30 lower if union representation remained at high levels the effect of deunionization on racial wage inequality for men is less substantial but without deunionization weekly wages for black men would be an estimated 49 higher the results recast organized labor as an institution vital for its economic inclusion of african american men and women this study points to the need to move beyond class based analyses of union decline to an understanding of the gendered role unions once played in mitigating racial inequality

cross sectional versus panel estimates of union wage effects abstract the main objective of this paper is to compare and reconcile the cross sectional and the panel estimates of union wage effects it uses panel survey of income dynamics psid data for a period of 6 years 1979 1984 unlike what freeman 1984 predicted i e panel union wage estimates would be smaller than pure cross sectional estimates due to the cumulative nature of the errors in reporting union status in the former both the cross sectional and panel estimates of union wage effects are very similar ranging from 11 to 13 unions seem to have flattering effect on the age earnings profiles not surprisingly the rate of return to schooling of non union members is larger than that of the union members

measuring globalization of international trade theory and evidence summary measuring globalization requires a standard of perfect international integration as a benchmark that a single world space would reach under conditions of geographic neutrality in international trade we define this standard and present indicators for openness connectedness and integration for each specific economy and for the world economy we apply our indicators to data on trade flows for 59 countries for the 1967 2004 period results show that trade integration is higher than what traditional openness indicators suggest several economies find high levels of integration but the low degree of openness in some large economies jeopardizes the progress of globalization

anticipation free rider problems and adaptation to trade unions re examining the curious case of dissatisfied union members this paper documents evidence that rejects the paradox of dissatisfied union members using eleven waves of the bhps it studies the past contemporaneous and future effects of union membership on job satisfaction by separating union free riders from other nonmembers in the fixed effects equations i find significant anticipation effects to unionism for prospective members and covered nonmembers of both genders workers go on to report on average a significant net increase in overall job satisfaction at the year unionization occurs nonetheless adaptation to unionism is complete within the first few years of joining a unionized firm one hypothesis for this is that workers adapt their reported satisfaction over time to support their union bargaining efforts which would be consistent with the explanation given by freeman and medoff 1984 of union s role in fanning the flame of discontent to the management during contract negotiations

a decision support model for selecting product service benefit positionings abstract the art and science of successful product service positioning generally hinges on the firm s ability to select a set of attractively priced consumer benefits that are valued by the buyer distinctive in one or more respects believable deliverable and sustainable under actual or potential competitive abilities to imitate neutralize or overcome in the target markets that the firm selects while easily said meeting all of these conditions is often the exception rather than the rule for many years the ubiquitous quadrant chart has been used to provide a simple graph of product service benefits usually called product service attributes described in terms of consumers perceptions of the importance of attributes to brand supplier choice and the performance of competing firms on these attributes this paper describes a model that extends the quadrant chart concept to a decision support system that optimizes a firm s market share for a specified product service in particular we describe a decision support model that utilizes relatively simple marketing research data on consumers judged benefit importances and supplier performances on these benefits to develop message components for specified target buyers a case study is used to illustrate the model the study deals with developing advertising message components for a relatively new entrant in the us air shipping market we also discuss more briefly management reactions to application of the model to date and areas for further research and model extension

job queues and the union status of workers this paper develops a model of the determination of the union status of workers that allows for the possibility of queuing for union jobs the empirical results derived using a sample from the university of michigan panel study of income dynamics are supportive of the queuing hypothesis the no queue model can be rejected using a likelihood ratio test this suggests that a simple probit or logit model for union status is misspecified because it is not based on any consistent behavioral theory an important implication of the model is that because most new entrants to the labor market prefer union jobs but cannot get them and because accrual of nonunion seniority makes workers progressively less likely to desire union jobs the union status of workers is largely determined by their success in being selected from the queue early in their working life

why do part time workers earn less the role of worker and job skills part time workers receive considerably lower hourly earnings than do full time workers using current population survey earnings files for september 1995 through december 2002 the author finds that measurable worker and job characteristics including occupational skill requirements account for much of the part time penalty longitudinal analysis of the data indicates that much of the remaining gap reflects worker heterogeneity evidenced by small wage gains and losses among workers switching between part time and full time jobs the lower skills of part time than full time workers result primarily from limited work experience and accumulation of human capital little evidence can be found of a large wage gap between part time and full time women a part time wage penalty is found for men but men account for less than one third of total part time employment

union effects on wages and wage growth abstract this paper employs a pooled cross section time series error variance components model applied to panel data to present new estimates of the impact of unions on earnings profiles it avoids union status measurement errors alluded to by freeman 1984 contained in current panel estimates by limiting analysis to a set of one time union status switches for which union status data could be sufficiently cross checked it avoids heterogeneity biases by comparing entire earnings profiles for given workers before and after their union status change finally potential selectivity biases in using a non random sample of only union switchers is found not to plague the reported results

contractual wages and the wage cushion under different bargaining settings how does a typically european bargaining system with collective bargaining and national minimum wage coexist with low unemployment and high wage flexibility a unique data set on workers firms and collective bargaining contracts in portugal is used to analyze the determinants of both the contractual wage and the wage cushion difference between contractual and actual wages the results indicate that the wage cushion stretches the returns to worker and firm attributes whereas it shrinks the returns to union power therefore firm specific arrangements partly offset collective bargaining granting firms certain freedom when setting wages contractual wages reflect trade unions egalitarian policy

union status of young men in britain a decade of change previous empirical studies of individual union status in britain have been cross sectional in contrast we use longitudinal data from the national child development study to estimate the determinants of male trade union membership over the period 1981 1991 as suggested by union theories we find that it is important to control for unobserved individual heterogeneity and our preferred model allows for correlation of individual heterogeneity with observable variables our estimates reveal that the observed decline in very large workplaces and the contraction of the public sector explain about one third of the predicted decline in union membership over the period

new estimates of union wage effects in the u s abstract we present new estimates for union wage effects using a unique dataset with information on job skill requirements we find the union wage premium to be smaller at higher skill levels consistent with the view that unions work to decrease skill differentials

unionism and wages a longitudinal analysis the impact of unionism on relative wage rates is a topic of long standing interest in labor economics over the years researchers have used a variety of approaches to estimate the wage advantage associated with union membership initially researchers compared the average wages of union and nonunion workers in specific sectors such as an industry this approach has the obvious limitation of not accounting very well for the various quality or productivity differences that exist among workers differences that command compensating wage payments more recent studies have used cross section wage regressions to control for these other determinants of wages and thereby improve estimates of the union wage effect using large microeconomic data files containing detailed information on characteristics of individual workers numerous studies have estimated wage regressions that include controls for worker characteristics education experience etc and a dichotomous variable indicating union membership status as explanatory variables 2 the coefficient of the union membership variable in these regressions is taken as an estimate of the average impact that unionism has on wage rates controlling for measured differences in characteristics among workers unfortunately the wage regression approach does not completely resolve the problem of standardizing the union nonunion wage comparison for differences in worker quality even with detailed microdata on the characteristics of individual workers it is simply not possible to specify a set of variables that completely captures all worker specific differences in productive ability some aspects of human capital are too subtle to be operationally specified and included in a wage regression although they are recognized and paid for by employers to the extent that these unmeasured worker specific differences are correlated with union membership the wage regression will incorrectly attribute a relative wage impact to unionism 3 an alternative measurement approach that has several advantages over the wage regression is to compare the wage received by the same worker as a union and nonunion member in the past data limitations have prevented researchers from making such a comparison since only a small portion of workers change union status in a given period an unusually large longitudinal file is needed to yield a sufficient number of observed changes for a meaningful analysis 4 recently however large longitudinal data files on individuals participating in the current population survey have become available this paper uses these data to estimate the impact a change in union status has on the worker s wage the

estimating the economic return to educational levels using data on twins this paper relaxes some restrictions of previous twin based estimates of the effects of education on earnings first it estimates the earnings premiums associated with different educational levels second it estimates a piecewise linear relationship between the natural logarithm of annual earnings and years of schooling third the measurement error corrections are based on a less restrictive non classical measurement error model the estimation strategy implies that ability bias can be investigated separately in different parts of the educational distribution the linear relationship between the logarithm of annual earnings and years of schooling is rejected furthermore the results in the sample of identical mz twins indicated both that the ability bias could be of different signs and of different magnitudes in different parts of the educational distribution the twin based estimates in the sample of fraternal dz twins did not display any marked differences as compared to the cross sectional estimates finally the results indicated that the error corrected twin based estimates of the average return to years of schooling that rely on a classical measurement error model are upwards biased by approximately 30 copyright 2004 john wiley sons ltd

does parents money matter abstract this paper asks whether parents income per se has a positive impact on children s abilities previous research has established that income is positively correlated across generations this does not prove that parents money matters however since income is presumably correlated with ability this paper estimates the impact of parents income by focusing on income variation due to factors union industry and job loss that arguably represent luck i find that changes in parents income due to luck have a negligible impact on children s human capital for most families although parents money does matter for families whose father has low education

the interindustry structure of unionism earnings and earnings dispersion this study examines the relationship between unionism and earnings dispersion within u s manufacturing and nonmanufacturing industries the author hypothesizes not only that unionism narrows earnings dispersion as others have shown but also that the dispersion in earnings reflecting the degree of worker homogeneity influences the level of unionism estimation of a three equation model using 1970 three digit industry data provides evidence regarding the simultaneous determination of unionism earnings and earnings dispersion within u s industries the estimated equalizing effects of unionism on within industry earnings distributions are found to be significant both in the manufacturing and nonmanufacturing sectors the size of these estimates increasing after accounting for simultaneity in addition the dispersion in earnings does appear to affect the level of unionism although the evidence on this point is ambiguous

canadian jobs and firm size do smaller firms pay less even after controlling for observable workers characteristics and for occupation and industry specific effects a substantial wage differential remains between large and small firms what underlies the remaining wage differential is unclear direct evidence on pension plan coverage and on lay off rates by firm size is inconsistent with the bad working conditions hypothesis the union avoidance hypothesis does not seem to explain an important portion o f the wage differential as suggested by efficiency wage models part of the remaining wage differential may be due to firms heterogeneity similarly perhaps large firms pay higher wages simply partly beca use they employ workers with more unobserved abilities because differen t explanations of the wage differential may lead to different policy implications determining the source of the wage firm size effect is an important question for future research

context dependent preferences the standard theory of choice based on value maximization associates with each option a real value such that given an offered set the decision maker chooses the option with the highest value despite its simplicity and intuitive appeal there is a growing body of data that is inconsistent with this theory in particular the relative attractiveness of x compared to y often depends on the presence or absence of a third option z and the market share of an option can actually be increased by enlarging the offered set we review recent empirical findings that are inconsistent with value maximization and present a context dependent model that expresses the value of each option as an additive combination of two components a contingent weighting process that captures the effect of the background context and a binary comparison process that describes the effect of the local context the model accounts for observed violations of the standard theory and provides a framework for analyzing context dependent p

a reexamination of the federal private wage differential in the united states the federal private wage differential is reexamined with recent data using specifications similar to those used in three previous studies i find that the federal private wage differential has narrowed since the 1974 79 period analyzed in those studies in addition i discover that wage differentials based on specifications used in the literature are biased upward because the previous studies did not control for detailed occupational and locational characteristics of workers corrected point estimates of the wage gap are much smaller than previous estimates in the literature differences in the gap across demographic groups occupations and locations are also discussed

pensions and wage premia i introduction despite the widespread acceptance of the theory of compensating differences empirical efforts to estimate the magnitude of these differences have met with only mixed success 1 with the exception of fatal risks economists have not been able to consistently find a significant relationship between wages and other job characteristics the failure to find consistent evidence on compensating differentials has been attributed to either poor measures of non wage characteristics or inadequate controls for worker productivity 2 studies by gunderson hyatt and pesando 1992 montgomery shaw and benedict 1992 and moore 1987 which have been able to explicitly address these issues have had greater success in finding significant compensating differentials in this paper we focus on an alternative explanation for the variation in estimated compensating differentials that the magnitude of the compensating differential varies systematically across different sectors in the labor market the theory of compensating differentials predicts that the implicit price or cost of providing a job attribute such as pensions will be a function of firm or industry technological differences and that the value attached to that attribute will also vary across workers depending on their tastes if workers and firms are not randomly assigned to sectors this will lead to systematic variations in the size of the estimated compensating differential across sectors or markets the result of this variation is that studies using different subsamples of the labor force will yield very different estimates of the size of the compensating differential the few studies that have addressed sources of heterogeneity in compensating differentials have concentrated on testing for individual differences in tastes for risk 3 in contrast our emphasis is on firm side differences in technologies or market power we estimate the compensating differential between annual pension accruals and wage rates and let this tradeoff vary by firm size and union status with corrections for selectivity bias the implicit cost of pensions and hence the size of the compensating differential may vary by finn size or union status for a number of reasons greater ability to spread fixed administrative costs across a large work force more difficulty monitoring worker effort or the presence of market power thus the cost of fringe benefits to the firm may be lower in large or unionized firms than in small nonunion firms we find empirical evidence supporting this view the estimated wage pension compensating differentials are smaller in unionized and large firms than in small nonunion firms the results from this paper are significant for several reasons 1 they provide evidence that compensating differentials vary across markets this evidence could account for some of the differences in estimates of tradeoffs across studies that have used different nonrandom samples 4 more importantly these sectoral differences serve as a reminder that the labor market is in fact a multitude of markets and that technological differences that vary across markets should be considered when addressing issues ranging from estimating the returns to human capital investment to the impact of the minimum wage 5 2 these results also deepen our knowledge of the relationship between pensions and wages a relationship that has important implications for the shape of workers wage earnings profiles or for the mechanisms for motivating workers and for the returns to human capital and for the distribution of income regarding the latter pensions are a large component of compensation and work by even and macpherson 1990 mccarthy and turner 1983 and moore 1987 suggests that coverage rates and returns are smaller for women and blacks our analysis suggests that an element of the differences could be sectoral choices

does unmeasured ability explain inter industry wage differentials this paper provides empirical assessments of the two leading explanations of measured inter industry wage differentials 1 true wage differentials exist across industries and 2 the measured differentials simply reflect unmeasured differences in workers productive abilities first we summarize the existing evidence on the unmeasured ability explanation second we construct a simple model which shows that if matching is important then endogenous job change decisions can create important self selection biases even in first differenced estimates of industry wage differentials third we analyze a sample that approximates the experiment of exogenous job loss we find that i the wage change experienced by a typical industry switcher closely resembles the difference in the relevant industry differentials estimated in a cross section and ii pre displacement industry affiliation plays an important role in post displacement wage determination

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

the endogeneity of union status an empirical test an unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model in the context of a three equation model determining union membership and union and nonunion sector wage rates this paper presents an instrumental variables iv procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the hausman specification test an advantage of our iv procedure in comparison to the widely used inverse mill s ratio procedure is that our procedure is a distribution free estimator whereas the inverse mill s ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed using data for a sample of middle aged white workers we estimate the parameters of the union and nonunion wage equations with both procedures on the key question of the endogeneity of union status the hausman test decisively rejects the null hypothesis of exo

union wage practices and wage dispersion within establishments this study analyzes establishment level data primarily to examine the effect of unionism on the wage structure within establishments the major finding is that within establishment dispersion of wages is significantly narrower in unionized than in nonunionized establishments a pattern the author attributes in large part to unions wage practices such as single rate or automatic progression modes of wage payment as opposed to merit reviews and individual wage determination the data also show that dispersion in average wages is narrower among organized plants but by more modest amounts than the within establishment differential overall the evidence suggests a major role for explicit union wage policies in explaining the dispersion of wages within firms and in the economy as a whole

unions wages and skills studies uniformly conclude that union wage effects are largest for workers with low measured skills longitudinal analysis using 1989 90 1994 95 cps matched panels produces union premium estimates equivalent across skill groups following appropriate sample restrictions and control for worker specific skills nlsy evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization union organizing where skills are homogeneous and unionized employers reluctance to hire the most as well as least able workers

classification error models and labor market dynamics measurement error is often a severe problem in longitudinal data such as labor market flows two correction methods have been used for labor market flows but the methods tend to adjust the data in opposite directions one method shows a rigid labor market with long unemployment spells whereas the other shows the opposite because the methods appear theoretically similar one might interpret the differing results as an indictment of both procedures this article documents and explains the differences between the two methods more important it argues that the differences result from the reliance of one method on assumptions that are theoretically implausible and rejected by the data

longitudinal analyses of the effects of trade unions but union members are different from nonmembers in unobserved ways biasing your estimates y ou should make a selectivity bias correction simultaneously determine union status and economic outcomes develop an unobservables model use longitudinal data archetypical comment on virtually any study of the economic effects of umomsm or suitably modified on any other empirical subject

unions industrial concentration and wages a re examination market structure or industrial concentration has long been recognized as an important influence on industrial output employment and profits it has also been recognized that some proportion of the profits from concentration may be diverted into wages through collective bargaining yet the precise nature of these relationships has received little attention although it has important implications for the evaluation of wage structure and the welfare loss arising from monopoly empirical studies of the impact of unions and industrial concentration on wages weiss 1966 jones and laudadio 1975 dalton and ford 1977 long and link 1983 follow a similar format after a brief verbal justification for the ability of unions to win higher wage increases when the employer is earning oligopoly profits these studies specify a wage equation of the general form

equality under threat by the talented evidence from worker managed firms does workplace democracy engender greater pay equality are high ability individuals more likely to quit egalitarian organisational regimes the article revisits this long standing issue by analysing the interplay between compensation structure and quit behaviour in the distinct yet underexplored institutional setting of worker managed firms the analysis is based on novel administrative data sources which allow constructing a simple ordinal measure of the workers ability type the article s key findings are that worker managed firms have a more compressed compensation structure than conventional firms and high ability members are more likely than other members to exit

wage effects of unionization and occupational licensing coverage in the united states recent estimates in standard models of wage determination for both unionization and occupational licensing have shown wage effects that are similar across the two institutions these cross sectional estimates use specialized data sets with small sample sizes for the period 2006 to 2008 the authors analysis examines the impact of unions and licensing coverage on wage determination using new data collected on licensing statutes that are then linked to longitudinal data from the national longitudinal survey of youth nlsy79 from 1979 to 2010 they develop several approaches using both cross sectional and longitudinal analyses to measure the impact of these two labor market institutions on wage determination the estimates of the economic returns to union coverage are greater than those for licensing statutes

expenditure behavior and children s welfare an analysis of female headed households in jamaica abstract evidence from jamaica shows that the sex and union status of the household head can have a significant influence on household expenditure behavior with implications for individual household members while the presence of a female decision maker generally increases the share of the household budget allocated to child and family goods female headed households fhhs also spend more on adult wear and less on health lower health expenditures are partially offset by the differential use of other health inputs in fhhs these differences in resource allocation may explain why poorer fhhs do not necessarily have lower children s outcomes in developing countries

match bias in wage gap estimates due to earnings imputation about 30 of workers in the current population survey have earnings imputed wage gap estimates are biased toward zero when the attribute being studied e g union status is not a criterion used to match donors to nonrespondents an expression for match bias is derived in which attenuation equals the sum of match error rates attenuation can be approximated by the proportion with imputed earnings union wage gap estimates with match bias removed are presented for 1973 2001 estimates for recent years are biased downward 5 percentage points bias in gap estimates accompanying other non match criteria public sector industry etc is examined

understanding the gender pay gap what s competition got to do with it a number of researchers have argued that men and women have different attitudes toward and behavioral responses to competition that is women are more likely to opt out of jobs in which performance pay is the norm and to under perform in some competitive situations laboratory experiments suggest that these gender differences are rather large to check these hypotheses and findings against differences in the field the authors use performance pay as an indicator of competition in the workplace and compare the gender gap not only in incidence of performance pay but also in earnings and work effort under these contracts they find that although women are less likely than men to work under performance pay contracts the gender gap is small furthermore the effect of performance pay on earnings is modest and does not differ markedly by gender consequently the authors argue the ability of these competition hypotheses to explain the gender pay gap seems very limited