The Impact of Deunionisation on Earnings Dispersion Revisited

Abstract

This paper examines the effects of union decline in Britain on changes in earnings dispersion between 1983 and 1995. As part and parcel of the exercise, the effects of changes in the wage gap and the variance gap are also calculated. Detailed findings are provided by gender and broad sector, allowing for worker characteristics and the skill gradient. Deunionisation is shown to account for surprisingly little of the increase in earnings dispersion in the private sector for either males or females. Although union decline has been more muted in the public sector, union effects are actually stronger here. In the public sector, unions no longer reduce earnings variation as much they once did by virtue of their growing tendency to organise more skilled groups.

Keywords: Deunionization, Union Structure, Earnings Dispersion, Wage Gap, Variance Gap, Private/Public Sector

JEL Classification: D3, J31, J51