This study, using individual worker data on janitors taken from the 1985–2001 Current Population Survey and industry injury data from the Bureau of Labor Statistics, examines whether compensation for working in a high-risk work environment contributes to the relatively high wage rates of hospital janitors. The authors find that when the analysis corrects for risk endogeneity (workers' tendency to sort themselves according to their tolerance for workplace risk), risk compensation increases wage rates by 13.4% for union hospital janitors and is a major source of their wage advantage over nonunion janitors in other industries. Since this risk compensation is only available to union workers, the authors interpret this result as the effect of the union voice mechanism.
Get full access to this article
View all access options for this article.
References
1.
ArabsheibaniG. RezaMarinAlan. 2001. “Self-Selection Bias with a Continuous Variable: Potential Pitfall in a Common Procedure.”Applied Economics, Vol. 33, No. 15 (December), pp. 1903–10.
2.
ArnouldRichard J.NicholsLen M., 1983. “Wage-Risk Premiums and Workers' Compensation: A Refinement of Estimates of Compensating Wage Differential.”Journal of Political Economy, Vol. 91, No. 2 (April), pp. 332–40.
3.
DormanPeterHagstromPaul. 1998. “Wage Compensation for Dangerous Work Revisited.”Industrial and Labor Relations Review, Vol. 52, No. 1 (October), pp. 116–35.
4.
DuncanGreg J.StaffordFrank P., 1980. “Do Union Members Receive Compensating Wage Differentials?”American Economic Review, Vol. 70, No. 3 (June), pp. 355–71.
5.
ElliottRobert F.SandyRobert. 1998. “Adam Smith May Have Been Right after All: A New Approach to the Analysis of Compensating Differentials.”Economics Letters, Vol. 59, No. 1 (April), pp. 127–31.
6.
EricksonChristopher L.FiskCatherine L.MilkmanRuthMitchellDaniel J.B.WongKent. 2001. “Justice for Janitors in Los Angeles and Beyond: A New Form of Unionism in the 21st Century?” Paper presented at the 23rd Annual Middlebury Economics Conference.
7.
FreemanRichard B.MedoffJames L., 1984. What Do Unions Do?New York: Basic Books.
8.
GarenJohn. 1988. “Compensating Differentials and the Endogeneity of Job Riskiness.”Review of Economics and Statistics, Vol. 70, No. 1 (February), pp. 9–16.
9.
GundersonMorleyHyattDouglas. 2001. “Workplace Risks and Wages: Canadian Evidence from Alternative Models.”Canadian Journal of Economics, Vol. 34, No. 2 (May), pp. 377–95.
10.
HamermeshDaniel S.WolfeJohn R., 1990. “Compensating Wage Differentials and the Duration of Wage Loss.”Journal of Labor Economics, Vol. 8, No. 1 (January), pp. 175–97.
11.
KniesnerThomas J.LeethJohn D., 1991. “Compensating Differentials for Fatal Injury Risk in Australia, Japan, and the United States.”Journal of Risk and Uncertainty, Vol. 4, No. 1 (January), pp. 75–90.
12.
LehrerEvelyn L.WhiteWilliam D.YoungWendy B., 1991. “The Three Avenues to a Registered Nurse License: A Comparative Analysis.”Journal of Human Resources, Vol. 26, No. 2 (Spring), pp. 262–79.
13.
LinkCharles R.1988. “Returns to Nursing Education, 1970–1984.”Journal of Human Resources, Vol. 23, No. 3 (Summer), pp. 372–87.
14.
SandyRobertElliotRobert F., 1996. “Unions and Risk: Their Impact on the Level of Compensation for Fatal Risk.”Economica, Vol. 63, No. 250 (May), pp. 291–309.
15.
SandyRobertElliottRobert F.SiebertW. StanleyWeiXiangdong. 2001. “Measurement Error and the Effects of Unions on the Compensating Differentials for Fatal Workplace Risks.”Journal of Risk and Uncertainty, Vol. 23, No. 1 (July), pp. 33–56.
16.
SchumacherEdward J.HirschBarry T., 1997. “Compensating Differentials and Unmeasured Ability in the Labor Market for Nurses: Why Do Hospitals Pay More?”Industrial and Labor Relations Review, Vol. 50, No. 4 (July), pp. 557–79.
17.
SiebertW. StanleyWeiXiangdong. 1994. “Compensating Wage Differentials for Workplace Accidents: Evidence for Union and Non-Union Workers in the UK.”Journal of Risk and Uncertainty, Vol. 9, No. 1 (July), pp. 61–76.
18.
ThalerRichardRosenSherwin. 1976. “The Value of Saving a Life: Evidence from the Labor Market.” In TerleckyjNestor E., ed., Household Production and Consumption. New York: Columbia University Press.
19.
ViscusiW. Kip. 1978. “Wealth Effects and Earnings Premiums for Job Hazards.”Review of Economics and Statistics, Vol. 60, No. 3 (August), pp. 408–16.
20.
ViscusiW. Kip. 1993. “The Value of Risks to Life and Health.”Journal of Economic Literature, Vol. 31, No. 4 (December), pp. 1912–46.
21.
ViscusiW. KipMooreMichael J., 1987. “Workers' Compensation: Wage Effects, Benefits Inadequacies, and the Value of Health Losses.”Review of Economics and Statistics, Vol. 69, No. 2 (May), pp. 249–61.
