Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152322
Authors: 
Addison, John T.
Portugal, Pedro
Vilares, Hugo
Year of Publication: 
2017
Series/Report no.: 
GLO Discussion Paper 5
Abstract: 
We estimate the impact of union density on wages using Portuguese matched employer-employee-contract data, extending Gelbach’s (2016) omitted variable bias decomposition procedure to obtain the contribution of worker, firm, and job-title heterogeneity to the union wage premium. The principal result is the dominance of the firm fixed effect: the allocation of workers among firms with different wage policies. For their part, the unobserved skills of union workers have only a modest impact on wages. In turn, job titles reflect the average contract in the collective agreement, while the wage cushion offers firms a margin of flexibility, partially undoing increases in the bargained wage. Finally, there is little to suggest that the union wage gap is influenced by improved match quality.
Subjects: 
union density
union wage gap
total compensation
bargained wages
wage cushion
wage supplements
worker/firm/job-title fixed effects
Gelbach decomposition
JEL: 
J31
J33
J41
J51
J52
Document Type: 
Working Paper

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