UNION NONUNION WAGE DIFFERENTIALS - INDIVIDUAL-LEVEL AND ORGANIZATIONAL LEVEL EFFECTS

The wage difference between unionized and non-unionized employees is a ssumed to be small in Norway (and in other Scandinavian countries), du e to a high degree of unionization, spill-over effects, and standard r ate policies. Previous research nevertheless indicates that there is a union member-non-member wage differential, at least for blue-collar w orkers. For white-collar workers the wage differential is smaller or e ven negative. This paper argues that in an economy with widespread spi ll-over and standardization, the union-non-union wage differential cou ld be due to (1) effects of union strength (as measured by the degree of unionization) at the establishment or industry level, or (2) select ion effects at the individual level. Degree of unionization or selecti on effects may also explain why the union-non-union wage differential is larger for blue-collar than for white-collar employees. In the priv ate sector, the blue-collar-white-collar difference in the wage differ ential can be accounted for by degree-of-unionization effects. In the public sector, there seems in addition to be some positive selection f or union membership. Unionization also serves to narrow the wage diffe rential between blue-collar and white-collar workers, in part by keepi ng white-collar wages down.