Research project Unions and the Educational Wage Premium: Collective Bargaining and Wage Inequality

Unions and the Educational Wage Premium: Collective Bargaining and Wage Inequality in the Knowledge Economy

Declining unionization has led to rising wage inequality. While most analyses of union effects have focused on low-wage workers, increasing wage inequality has also included growing differences between college and non-college educated workers. The role of unions in shaping these educational wage premia has however so far remained unexplored.
Using unique comparative data on union membership compositions, union organizations, bargaining structures and education wage premia for the period 2002 to 2020, we ask:

1. Is the educational composition of union membership related to the education premium? Unions are expected to increase inequality between members and non-members and reduce differences among members, yet these theories ignore union membership composition and union effects may depend on the relative unionization of unskilled and highly educated labor.

2. Is the union education effect related to unions’ organizational structure? Unions may increase membership by organizing both low- and high-wage earners, or by organizing specific occupational groups. These choices could have implications for union bargaining goals and strategies, and for the education wage premium.

3. Is the union education effect related to bargaining structure? Unionization and the education premium may also be linked through the structure of wage bargaining, e.g. the coordination of wage bargaining. This theoretically reduces wage dispersion, a mechanism that here will be examined empirically.