UNION EFFECTS ON NONUNION WAGES - EVIDENCE FROM PANEL-DATA ON INDUSTRIES AND CITIES

The authors test for threat and crowding effects of unions on nonunion wages at the industry and city levels, using panel data on the percen t organized and nonunion industry and city wage differentials construc ted from Current Population Surveys over the period 1973-89. At the in dustry level, increases in the percent organized were associated with decreases in the nonunion industry wage differential, suggesting that crowding effects were the predominant union effect on nonunion industr y wage differentials. In contrast, at the city level increases in the percent organized were associated with increases in the nonunion city wage differential, suggesting that threat effects predominated. The au thors also find evidence of negative cross-occupation union effects on nonunion industry wage differentials, supporting their hypothesis tha t the industry-level results were partly driven by complementarity bet ween union and nonunion labor.