Unions and interindustry wage differentials

We investigate the importance of trade unions in collective bargaining in t he context of a developing country manufacturing labor market. The methodol ogy we adopt to estimate wage differentials follows the method proposed by Haisken-DeNew, J. P. and Schmidt, C. M. (1997) Review of Economics and Stat istics 79, 516-521, since it improves on the standard procedure popularized by Krueger, A. B. and Summers, L. H. (1988) Econometrica 56, 193-259. Our findings indicate that wage dispersion is far greater in the unionized sect or of Brazilian manufacturing, in contrast to evidence from other countries . (C) 1999 Elsevier Science Ltd. All rights reserved.