Centre for Vocational Education Research LSE RSS Email Facebook Twitter


CEP discussion paper
Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay
A Charlwood, Kirstine Hansen and David Metcalf March 2000
Paper No' CEPDP0452:
Full Paper (pdf)

Tags: unions; pay distribution; discrimination

Dispersion in pay is lower among union members than among non-unionists. This reflects two factors. First, union members and jobs are more homogeneous than their non-union counterparts. Second, union wage policies within and across firms lower pay dispersion. Unions' minimum wage targets also truncate the lower tail of the union distribution. There are two major consequences of these egalitarian union wage policies. First, the return to human capital is lower in firms which recognise unions than in the unorganised sector. Second, unions compress the wage structure by gender, race and occupation.