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Author: Duncan, Gregory M.
Resulting in 2 citations.
1. Duncan, Gregory M.
Leigh, Duane E.
Wage Determination in the Union and Nonunion Sectors: A Sample Selectivity Approach
Industrial and Labor Relations Review 34,1 (October 1980): 2-33.
Also: http://www.jstor.org/stable/2522631
Cohort(s): Older Men
Publisher: New York State School of Industrial and Labor Relations, Cornell University
Keyword(s): Family Influences; Marital Status; Schooling; Unions; Vocational Training; Wage Differentials

This paper re-examines the question of whether wages are determined differently in the union and nonunion sectors. This study uses a methodology proposed by Heckman and Lee to correct for the possibility that wage differences may determine the union status of workers as well as vice versa. The authors find that union status is strongly related to the predicted union-nonunion wage differential, but their evidence nevertheless reinforces Bloch and Kuskin's empirical finding that the union earnings function is less sensitive than nonunion earnings function to changes in nearly every observable attribute of workers, such as education and experience. The authors also conclude that previous studies using separately estimated union and nonunion wage equations may have understated the success of unions in raising the relative wages of their members.
Bibliography Citation
Duncan, Gregory M. and Duane E. Leigh. "Wage Determination in the Union and Nonunion Sectors: A Sample Selectivity Approach." Industrial and Labor Relations Review 34,1 (October 1980): 2-33.
2. Leigh, Duane E.
Duncan, Gregory M.
Endogeneity of Union Status: An Empirical Demonstration
Unpublished manuscript, Department of Economics, Washington State University, Pullman, 1983
Cohort(s): Older Men, Young Men
Publisher: Department of Economics, Washington State University
Keyword(s): Endogeneity; Unions; Variables, Instrumental; Wage Determination; Wage Effects; Wages

An unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model. In the context of a three-equation model determining union membership and union and nonunion sector wage rates, this paper presents an instrumental variables (IV) procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the Hausman specification test. An advantage of our IV procedure in comparison to the widely used inverse Mill's ration procedure is that our procedure is a distribution-free estimator, whereas the inverse Mill's ration estimator hinges on the assumption that the joint probability distributions of the error terms are bivariate normal. Using data for a sample of middle-aged white workers, we estimate the parameters of the union and nonunion wage equations with both procedures. On the key question of the endogeneity of union status, the Hausman test decisively rejects the null hypothesis of exogeneity. The inverse Mill's ratio procedure, in contrast, provides coefficient estimates on the selectivity terms that fail to indicate evidence of sample selectivity in either sector.
Bibliography Citation
Leigh, Duane E. and Gregory M. Duncan. "Endogeneity of Union Status: An Empirical Demonstration." Unpublished manuscript, Department of Economics, Washington State University, Pullman, 1983.