published in: Research in Labor Economics, 2007, 26, 337-363
This paper examines the effects of union decline in Britain on changes in earnings dispersion
between 1983 and 1995. As part and parcel of the exercise, the effects of changes in the
wage gap and the variance gap are also calculated. Detailed findings are provided by gender
and broad sector, allowing for worker characteristics and the skill gradient. Deunionisation is
shown to account for surprisingly little of the increase in earnings dispersion in the private
sector for either males or females. Although union decline has been more muted in the public
sector, union effects are actually stronger here. In the public sector, unions no longer reduce
earnings variation as much they once did by virtue of their growing tendency to organise
more skilled groups.
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