Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation

• Published in: Oxford bulletin of economics and statistics Vol. 60; no. 4; pp. 509 - 528
• Main Authors: Bell, Brian D., Pitt, Michael K.
• Format: Journal Article
• Language: English
• Published: Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.11.1998; Department of Economics, University of Oxford; Basil Blackwell; Blackwell Publishing Ltd
• Series: Oxford Bulletin of Economics and Statistics
• Subjects: Data analysis; Income distribution; Labor unions; Statistical analysis; Studies; Trade union influences; Trade union membership; Trade unionism; Union membership; Unionization; Wage differentials; Wage levels; Wage rates; United Kingdom > UK
• ISSN: 0305-9049; 1468-0084
• DOI: 10.1111/1468-0084.00111

This paper assesses the impact of changes in union density on the male structure in the UK over the 1980s. Using four separate data sets, we estimate the kernel density of hourly wages for men. Counterfactual densities are then generated to predict how the distribution of wages has changed over time because of the decline in union membership. We find that approximately 20 percent of the increase in the variance of log wages over the period can be attributed to changes in unionisation. The effect is particularly strong in the latter part of the period. We also present disaggregated estimates of the impact of declining unionisation. Our results are robuts across all the data sets we examine and similar results are obtained if union coverage is used rather than union membership.