Chart Detail

Effect of union decline on male wage differentials, 1978–2011

1978 1989 2000 2011
Percent of workers in union (“union coverage”)
By occupation White collar 14.7% 12.1% 11.2% 10.3%
Blue collar 43.1% 28.9% 23.1% 17.8%
Difference -28.4 -16.7 -11.9 -7.5
By education College 14.3% 11.9% 13.1% 12.1%
High school 37.9% 25.5% 20.4% 14.9%
Difference -23.6 -13.6 -7.4 -2.9
Union wage effect*
By occupation White collar 0.2% 0.0% -0.2% -0.2%
Blue collar 11.5% 6.7% 4.3% 3.5%
Difference (change in differential) -11.3 -6.8 -4.5 -3.6
By education College 0.9% 0.5% 0.9% 0.6%
High school 8.2% 5.5% 3.1% 2.6%
Difference (change in differential) -7.3 -5.0 -2.3 -2.0
1978–1989 1989–2000 2000–2011 1978–2011
Change in wage differential** White-collar/blue-collar 5.0 4.2 0.9 10.1
College/high school 13.0 8.0 2.8 23.9
Change in union wage effect White-collar/blue-collar -4.6 -2.3 -0.9 -7.7
College/high school -2.3 -2.5 -0.3 -5.1
Deunionization contribution to change in wage differential***
White-collar/blue-collar -90.5% -55.2% -91.8% -76.1%
College/high school -17.8 -30.7 -10.2 -21.2

* Union wage effect is "union wage premium" (estimated with simple human capital model plus industry and occupational controls) times union coverage; negative values in the difference row show how much unionization narrowed the wage gaps.

** Log wage gaps estimated with a simple human capital model

*** Change in union wage effect on wage differential divided by overall change in differential

Source: Authors' update of Freeman (1991) using Current Population Survey Outgoing Rotation Group microdata

Updated May 22, 2012

Documentation and methodology

This analysis replicates, updates, and expands on Freeman (1991), Table 2, using the CPS-ORG sample used in other analyses (see Appendix B). The year 1978, rather than 1979, is the earliest year analyzed because we have no union membership data in our 1979 sample. “Percent union” is the share covered by collective bargaining. The “union wage premium” for a group is based on the coefficient on collective bargaining coverage in a regression of hourly wages on a simple human capital model (the same one used for estimating education differentials, as described in note to Table 4.13), with major industry (12) and occupation (9) controls in a sample for that group. The change in union premium across years, therefore, holds industry and occupation composition constant. Freeman’s analysis assumed the union premium was unchanged over time. We allow the union premium to differ across years so changes in the “union effect” on wages (the union wage premium times union coverage) are driven by changes in the unionization rate and the union wage premium. The analysis divides the percentage-point change in the union effect on wage differentials by the actual percentage-point change in wage differentials (regression-adjusted with simple human capital controls plus controls for other education or occupation groups) to determine the deunionization contribution to the change in the wage gaps among men, which, as a negative percent, indicates contribution to the growth of the wage gaps.

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