Abstract
A reverse regression method of estimating the union-nonunion wage differential is developed using a multiple indicator model. The method provides a test for the multiple indicator model’s validity and suggests that conventional estimation techniques should underestimate the union-nonunion differential. Empirical estimates show that the reverse regression estimates are larger than conventional estimates and that the multiple indicator model cannot be rejected.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Abowd, J. and H. Farber. “Job Queues and Union Status.”Industrial and Labor Relations Review (April 1982): 354–67.
Ashenfelter, O. and G. Johnson. “Unionism, Relative Wages, and Labor Quality in U.S. Manufacturing Industries.”International Economic Review (October 1972): 488–503.
Becker, G.Human Capital. 2nd ed. Chicago: University of Chicago Press, 1975.
Blakemore, A., J. Hunt, and B. F. Kiker. “Collective Bargaining and Union Membership Effects on the Wages of Male Youths.”Journal of Labor Economics (April 1986): 193–211.
Conway, D. and V. Roberts. “Reverse Regression, Fairness, and Employment Discrimination.”Journal of Business and Economic Statistics (January 1983): 75–85.
Duncan, G. and D. Leigh. “Wage Determination in the Union and Nonunion Sectors: A Sample Selectivity Approach.”Industrial and Labor Relations Review (October 1980): 24–34.
Duncan, G. and F. Stafford. “Do Union Members Receive Compensating Wage Differentials?”American Economic Review (June 1980): 355–71.
Farber, H. “The Determination of the Union Status of Workers.”Econometrica (September 1983): 1417–38.
Filer, R. “The Influence of Effective Human Capital on the Wage Equation.” In R.G. Ehrenberg, ed.Research in Labor Economics. Vol. 4. Greenwich, Connecticut: JAI Press, 1981, pp. 367–416.
Freeman, R. and J. Medoff.What Do Unions Do? New York: Basic Books, 1984.
_____. “The Impact of Collective Bargaining: Can the New Facts Be Explained by Monopoly Unionism?” In R.G. Ehrenberg, ed.Research in Labor Economics, Supplement 2. 1983, pp. 293–332.
Goldberger, A.S. “Reverse Regression and Salary Discrimination.”Journal of Human Resources (Summer 1984): 293–318.
Heckman, J.J. “Sample Selection as a Specification Error.”Econometrica (January 1979): 153–61.
Jovanovic, B. “Job Matching and the Theory of Turnover.”Journal of Political Economy (October 1979): 972–90.
Kahn, L. “Unionism and Relative Wages: Direct and Indirect Effects.”Industrial and Labor Relations Review (July 1979): 520–32.
Kamalich, R.A. and S.W. Polachek. “Discrimination: Fact or Fiction? An Examination Using an Alternative Approach.”Southern Economic Journal (October 1982): 450–61.
Lee, L.F. “Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables.”International Economic Review (June 1978): 415–33.
Lewis, H.G.Unionism and Relative Wages in the United States. Chicago: University of Chicago Press, 1963.
_____.Union Relative Wage Effects: A Survey. Chicago: University of Chicago Press, 1986.
Parsley, C.J. “Labor Unions and Wages: A Survey.”Journal of Economic Literature (March 1980): 1–31.
Author information
Authors and Affiliations
Additional information
The author wishes to thank Robert J. Flanagan and H. G. Lewis for their valuable comments on earlier versions of this paper.
Rights and permissions
About this article
Cite this article
Benham, H.C. Union-nonunion wage differentials revisited. Journal of Labor Research 8, 369–383 (1987). https://doi.org/10.1007/BF02685220
Issue Date:
DOI: https://doi.org/10.1007/BF02685220