Using two Canadian data sets, the authors explore the role of union coverage in displaced workers' wage losses. While only 32% of the workers had unionized jobs prior to displacement, the wage loss suffered by these workers represented about 80% of the wages lost by all displaced workers in both samples. Losing union status was associated with large losses whether or not a worker switched industries after displacement. Extrapolating the results to the United States, the authors estimate that one-third to one-half of U.S. displaced workers' wage losses may be due purely to the loss of union coverage.
Get full access to this article
View all access options for this article.
References
1.
BailyMartin NeilBurtlessGary, and LitanRobert E.. 1993. Growth with Equity: Economic Policymaking for the Next Century. Washington, D.C.: Brookings Institution.
2.
BrowningMartinJonesS. R. G., and KuhnPeter J.. 1994. “Studies of Unemployment Insurance Based on the Out-of-Employment Panel Survey.” Unpublished paper, McMaster University.
3.
CarringtonWilliam J.1993. “Wage Losses for Displaced Workers: Is It the Firm That Matters?”Journal of Human Resources, Vol. 28 (Summer), pp. 435–61.
4.
CarringtonWilliam J., and ZamanAsad. 1994. “Interindustry Variation in the Costs of Job Displacement.”Journal of Labor Economics, Vol. 12 (April), pp. 243–75.
5.
CrossleyThomasJonesStephen R. G., and KuhnPeter. 1994. “Gender Differences in Displacement Costs: Evidence and Implications.”Journal of Human Resources, Vol. 29 (Spring), pp. 461–80.
6.
DiNardoJohn, and LemieuxThomas. 1997. “Diverging Male Wage Inequality in the United States and Canada, 1981–1988: Do Institutions Explain the Difference?”Industrial and Labor Relations Review, Vol. 50 (July), pp. 629–51.
7.
DoironDenise J.1995. “Lay-offs as Signals: The Canadian Evidence.”Canadian Journal of Economics, Vol. 28 (November), pp. 899–913.
8.
EvansDavid S., and LeightonLinda S.. 1995. “Retrospective Bias in the Displaced Worker Surveys.”Journal of Human Resources, Vol. 30 (Spring), pp. 386–96.
9.
FallickBruce. 1996. “A Review of the Recent Empirical Literature on Displaced Workers.”Industrial and Labor Relations Review, Vol. 50 (October), pp. 5–16.
10.
FarberHenry S., and KruegerAlan B.. 1992. “Union Membership in the United States: The Decline Continues.” Princeton Industrial Relations Section, Working Paper Number 306.
11.
FreemanRichard B., and KleinerMorris M.. 1994. “Do Unions Make Enterprises Insolvent?”National Bureau of Economic Research, Working Paper Number 9747.
12.
GibbonsRobert, and KatzLawrence F.. 1991“Lay-offs and Lemons.”Journal of Labour Economics, Vol. 9 (October), pp. 351–80.
13.
HamermeshDaniel S.1987. “The Costs of Worker Displacement.”Quarterly Journal of Economics, Vol. 102 (February), pp. 51–75.
14.
JacobsonLouis S.LaLondeRobert J., and SullivanDaniel G.. 1993. “Earnings Losses of Displaced Workers.”American Economic Review, Vol. 83 (September), pp. 685–709.
15.
KletzerLori Gladstein. 1989. “Returns to Seniority After Permanent Job Loss.”American Economic Review, Vol. 79 (June), pp. 536–43.
16.
KletzerLori Gladstein. 1992. “Industry Wage Differentials and Wait Unemployment.”Industrial Relations, Vol. 31 (Spring), pp. 250–69.
17.
KuhnPeter, and SweetmanArthur. 1994. “Trade Unions as Discriminating Monopolists: Theory and Evidence.”McMaster University, Working Paper No. 94–05.
18.
NealDerek. 1995. “Industry-Specific Human Capital: Evidence from Displaced Workers.”Journal of Labor Economics, Vol. 13 (October), pp. 653–77.
19.
PodgurskyMichael, and SwaimPaul. 1987. “Job Displacement and Earnings Loss: Evidence from the Displaced Worker Survey.”Industrial and Labor Relations Review, Vol. 41 (October), pp. 17–29.
20.
RiddellW. Craig. 1993. “Unionization in Canada and the United States: A Tale of Two Countries.” In CardDavid and FreemanRichard B., eds. Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States. Chicago: University of Chicago Press, pp. 109–48.
21.
SilvermanB. W.1986. Estimation for Statistics and Data Analysis. London: Chapman & Hall.
22.
TopelRobert. 1990. “Specific Capital and Unemployment: Measuring the Costs and Consequences of Job Loss.”Carnegie-Rochester Conference Series on Public Policy, Vol. 33, pp. 181–214.
23.
ZagorskyJay L.1995. “Comparing Displaced Workers in Canada and the United States.” Unpublished manuscript, Boston University.
