Revisiting Union Wage and Job Loss Effects Using the Displaced Worker Surveys.

Estimates of union wage effects have been challenged by concerns regarding unobserved worker heterogeneity and endogenous job changes. Many economists believe that union wage premiums lead to business failures and other forms of worker displacement. In this article, the authors examine displacement rates and union wage gaps using the 1994–2018 biennial Displaced Worker Survey (DWS) supplements to the monthly Current Population Surveys. For more than two decades, displacement rates among union and non-union workers have been remarkably similar. The authors observe changes in earnings resulting from transitions between union and non-union jobs following exogenous job changes. Consistent with prior evidence from the 1994 and 1996 DWS, findings show longitudinal estimates of average union wage effects close to 15%, which are similar to standard cross-section estimates and suggestive of minimal ability bias. Wage losses moving from union to non-union jobs exceed gains from non-union to union transitions. [ABSTRACT FROM AUTHOR]