Wage losses for displaced workers in the U.S.: What portion can be explained by the loss of union status?

• Main Author: Branson, Michael D.L
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2011
• Subjects: Bias; Displaced workers; Economics; Employment; Households; Labor economics; Labor relations; Nonunion; Public policy; Studies; Unemployment; Wages & salaries
• ISBN: 9781124597492; 1124597492

This paper examines the role of changes in union status in determining reemployment wages for displaced workers. The author uses a data set adapted from the 1994-2008 Current Population Survey Displaced Worker Supplement files that includes information on both pre- and post-displacement union status for a sample of workers displaced by plant or company closures. This complete information on union transition paths after displacement allows for a more thorough examination of union effects for displaced workers’ than has been possible in most past studies using cross-sectional data. The author finds that, consistent with past research, the loss of union status has a large and significant negative effect on workers’ post-displacement wages, and gaining union status is associated with a smaller and insignificant wage gain. On the aggregate, however, the loss of union status alone likely accounts for only approximately one-sixth of all wage losses for displaced workers—far lower than the one-third to one-half hypothesized in previous research. These findings are consistent with the view that a broad-based policy approach—one made up of worker retraining along with targeted wage supplements—can be effective in limiting the wage losses of displaced workers.