Trade union decline and the distribution of wages in the UK: Evidence from kernel density estimation

Abstract

This paper assesses the impact of changes in union density on the male structure in the UK over the 1980s. Using four separate data sets, we estimate the kernel density of hourly wages for men. Counterfactual densities are then generated to predict how the distribution of wages has changed over time because of the decline in union membership. We find that approximately 20 percent of the increase in the variance of log wages over the period can be attributed to changes in unionisation. The effect is particularly strong in the latter part of the period. We also present disaggregated estimates of the impact of declining unionisation. Our results are robuts across all the data sets we examine and similar results are obtained if union coverage is used rather than union membership. © Blackwell Publishers 1998.