Union wage differentials for covered members and nonmembers in Great Britain

Abstract

I present the first longitudinal estimates of covered union member and covered nonmember wage differentials in Great Britain. Cross-sectional estimates show that covered union members receive a premium of about 10 percent over other workers, but covered nonmembers have no significant wage differential. Longitudinal estimates that accounted for fixed effects, selectivity, and measurement error indicated that OLS estimates are downward biased. The 'true' union wage differential is likely about 30-35 percent. There is a large negative selection effect to union membership. No robust estimate could be found for covered nonmembers.