Do local union strategies explain the (unexpected) union pay premium in China?

PurposeThe authors investigate the extent to which differences in provincial union legislation have impacts on the union earnings premium.Design/methodology/approachContent analysis of provincial union regulations of 25 provinces is conducted to create two indices: one reflecting the degree of stringency of the local requirement that unions be established in a timely fashion and the other reflecting requirements for employers to negotiate wages with the union. The authors use individual level data from the China Family Panel Studies (CFPS) of 2010 to estimate the union earnings premium.FindingsThe authors find that unionised workers in China receive an earnings premium ranging from 6.4 to 9.6%, which is in range of other studies (but not all) for China that tend to find a (perhaps surprising) union wage premium in spite of the fact that unions tend to be “company unions” designed to foster stability and growth and to serve as a transmission belt for the wishes of the Party rather than bargaining for the benefit of their members. The authors also find that provincial requirements to establish unions in a timely fashion enhance the impact of unions on the earnings of their members, but provincial requirements to negotiate wages dampen the effect of unions on the earnings of their members. Reasons for these results are discussed.Originality/valueDespite this lack of independence of the Chinese unions, research continuously finds that Chinese unions have effects that are surprisingly similar to those of unions in Western countries. This paper drills deeper into the underlying mechanisms to see if local union strategies, exemplified by provincial union legislation, can explain the unexpected union effects on compensation. To the authors’ knowledge, this is the first paper to do so. Moreover, the authors use individual-level data in contrast to most studies on China that use firm or provincial level aggregate data.

Does Union Membership Pay Off? Evidence from Vietnamese SMEs

In the absence of adequate institutional mechanisms, trade unions can potentially promote some measure of equity and social justice for workers including for instance higher wages and other worker benefits. Yet limited data availability means little is known about the effect local firm-based trade unions may have on individual earnings in developing and transition economies. Using matched employer–employee data from the 2013 and 2015 SME surveys, this chapter examines the union wage premium among workers in Vietnamese small and medium-sized enterprises. Controlling for both firm and worker characteristics, including time-varying unobserved heterogeneity, the results show that unionized workers’ wages are 9–22 per cent higher than those of non-union workers, with the exact estimate depending on the econometric approach chosen.

State substitution for the trade union good: the case of paid holiday entitlements

Purpose The literature on the union wage premium is among the most extensive in labour economics but unions’ effects on other aspects of the wage-effort bargain have received much less attention. The purpose of this paper is to contribute to the literature through a study of the union premium in paid holiday entitlements. Design/methodology/approach The authors examine the size of the union premium on paid holidays over time, with a particular focus on how the premium was affected by the introduction of a statutory right to paid holidays. The data come from nationally representative surveys of employees and workplaces. Findings The authors find that the union premium on paid holidays is substantially larger than the union premium on wages. However, the premium fell with the introduction of a statutory minimum entitlement to paid leave. Originality/value This is the first study to examine explicitly the interaction between union representation and the law in this setting. The findings indicate the difficulties that unions have faced in protecting the most vulnerable employees in the UK labour market. The authors argue that the supplanting of voluntary joint regulation with statutory regulation is symptomatic of a wider decrease in the regulatory role of unions in the UK.

Unions and Non-Standard Work: Union Representation and Wage Premiums across Non-Standard Work Arrangements in Canada, 1997–2014

The authors examine the association between unionization and non-standard work in terms of coverage and wages. They use data from the master files of Canada’s Labour Force Survey (LFS) between 1997–98 and 2013–14 to define and measure non-standard work and to provide a continuum of vulnerability across work arrangements. The estimated probability of being employed in some form of non-permanent job increased 2.9 percentage points from 1997 to 2014. During that same period, the estimated probability of being in a non-full-time, non-permanent job—another way of capturing non-standard work—increased 2.5 percentage points. Although estimated union wage premiums declined rather precipitously for all groups, the union wage advantage remained highest among non-standard workers. Further, the authors find the union wage premium is largest for the most vulnerable of non-standard workers. In terms of estimates that look across the earnings distribution, the union wage premium among non-standard workers is larger for workers higher up the earnings profile.

Gender differences in the union wage premium? A comparative case study

Trade unions have changed from being male dominated to majority-female organizations. We use linked employer–employee surveys for Norway and Britain to examine whether, in keeping with a median voter model, the gender shift in union membership has resulted in differential wage returns to unionization among men and women. In Britain, while only women receive a union wage premium, only men benefit from the increased bargaining power of their union as indicated by workplace union density. In Norway, however, both men and women receive a union wage premium in male-dominated workplaces; but where the union is female dominated, women benefit more than men. The findings suggest British unions continue to adopt a paternalistic attitude to representing their membership, in contrast to their more progressive counterparts in Norway.

Model Uncertainty and Robustness

Model uncertainty is pervasive in social science. A key question is how robust empirical results are to sensible changes in model specification. We present a new approach and applied statistical software for computational multimodel analysis. Our approach proceeds in two steps: First, we estimate the modeling distribution of estimates across all combinations of possible controls as well as specified functional form issues, variable definitions, standard error calculations, and estimation commands. This allows analysts to present their core, preferred estimate in the context of a distribution of plausible estimates. Second, we develop a model influence analysis showing how each model ingredient affects the coefficient of interest. This shows which model assumptions, if any, are critical to obtaining an empirical result. We demonstrate the architecture and interpretation of multimodel analysis using data on the union wage premium, gender dynamics in mortgage lending, and tax flight migration among U.S. states. These illustrate how initial results can be strongly robust to alternative model specifications or remarkably dependent on a knife-edge specification.