Nonunion wage rates and the threat of unionization

Henry S. Farber

Research output: Contribution to journalArticlepeer-review

59 Scopus citations


Using CPS data for 1977-2002, the author investigates the extent to which the threat of union organization increases nonunion wages and reduces the union/nonunion wage differential. The results are mixed. Estimates employing the predicted probability of union membership as a measure of the union threat show no important link between the union threat and either nonunion wages or the union wage gap. Estimates focusing on two states' introduction of right-to-work laws, which arguably affect the threat of union organization independently of changes in labor demand, show that in one state the law was associated with a statistically significant drop in nonunion wages. Finally, an analysis of wage data for three industries that underwent deregulation - another natural experiment in which labor demand changes are unlikely to have been a complicating factor - yields stronger evidence of threat effects on nonunion wages than do either of the other two analyses.

Original languageEnglish (US)
Pages (from-to)335-352
Number of pages18
JournalIndustrial and Labor Relations Review
Issue number3
StatePublished - Apr 2005

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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