A NEW ECONOMETRIC-MODEL OF UNION THREAT EFFECTS

The union threat effect is the propensity of non-union employers to re sist union organization by raising wages. This study introduces an emp irical model of the non-union employer's optimal wage in the presence of threat effects. Estimates of an equation of a firm's unionization p robability provide key variables. Unlike previous models, this specifi cation derives directly from a theoretical model, separates threat eff ects from the influence of other union-non-union spillovers and effici ency wages and includes many factors affecting the probability of unio nization. Wage equation estimates reveal that the predicted threat of unionization did not significantly raise non-union wages in the United States in 1980.