Effect of collective bargaining decline on male wage differentials, 1978–2011
|Percent of workers covered by collective bargaining|
|Collective bargaining wage effect*|
|Difference (change in differential)||-11.3||-6.8||-4.5||-3.6|
|Difference (change in differential)||-7.3||-5.0||-2.3||-2.0|
|Change in wage differential**|
|Change in collective bargaining wage effect|
|Decline in collective bargaining advantage contribution to change in wage differential***|
* Collective bargaining effect is the "collective bargaining advantage" (estimated with simple human capital model plus industry and occupational controls) times collective bargaining coverage; negative values in the difference row show how much collective bargaining narrowed the wage gaps between white- and blue-collar workers and college- and high-school-educated workers.
** Log wage gaps estimated with a simple human capital model
*** Change in collective bargaining wage effect on wage differential divided by overall change in differential
Table 7. Effect of collective bargaining decline on male wage differentials, 1978–2011. This analysis replicates, updates, and expands on Freeman (1991), Table 2. The year 1978, rather than 1979, is the earliest year analyzed because we have no collective bargaining coverage data in our 1979 sample. “Percent of workers covered by collective bargaining” is the share of workers covered by a collective bargaining agreement. The “collective bargaining advantage” for a group is based on the coefficient on collective bargaining coverage in a regression of hourly wages on a simple human capital model, with major industry (12) and occupation (9) controls in a sample for that group. The change in collective bargaining advantage across years, therefore, holds industry and occupation composition constant. Freeman’s analysis assumed the collective bargaining advantage was unchanged over time. We allow the collective bargaining advantage to differ across years so changes in the “collective bargaining effect” on wages (the collective bargaining wage advantage times collective bargaining coverage) are driven by changes in collective bargaining coverage and the collective bargaining wage advantage. The analysis divides the percentage-point change in the collective bargaining effect on wage differentials by the actual percentage-point change in wage differentials (regression-adjusted with simple human capital controls plus controls for other education or occupation groups) to determine the “Decline in collective bargaining advantage contribution to change in wage differential” among men, which, as a negative percent, indicates contribution to the growth of the wage gaps. See Chapter 4 of The State of Working America, 12th Edition (Mishel et al. 2012).
Source: Author's update of Freeman (1991) using Current Population Survey Outgoing Rotation Group microdata
This chart appears in:
Previous chart: « Collective bargaining impact on paid leave, pension, and health benefits
Next chart: Collective bargaining wage advantage for subgroups »