Union wage premiums by gender and race: Evidence from PSID 1980–1992
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We find that the overall union wage premium is relatively stable (ranging from 22.3 to 28.4 percent), but there seems to be a convergence of union wage premiums across different demographic groups between 1980 and 1992. Nonwhite men (whose premium ranges from 23.5 to 36.2 percent) show the largest gain, followed by white women (17.1 to 30.5 percent), white men (19 to 26.4 percent), and nonwhite women (10 to 20 percent). One explanation for this convergence of union wage premiums might be the “equalization hypothesis” associated with unions. This converging trend could have important implications for the future of unions. If union membership can explain a portion of the gender/racial wage gap, and if women/nonwhites can obtain, through union membership significant wage premia, increased female/nonwhite union participation in highly unionized sectors that offer high union wage gains could, in time, greatly decrease the gender/racial wage differential.
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