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The union effect on the wage distribution arises from two distinct effects.
However, this union effect disappears in Table6, a potential reflection of educational or occupational capital, specific to the unionized industry.
Causality (in the absence of fully fledged general equilibrium analysis, inter al). is arguably less of an issue here than the magnitude of the union effect.
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The evidence for union-related differences in student outcomes is mixed, but suggestive of insignificant or modestly negative union effects.
Hence, the descriptive evidence in Table 1 is likely to be driven by plant size, industry, and union effects.
Theoretical developments in the areas of collective voice and contract theory that focus on internal labor market structuring have offered support for pro-productive union effects.
The early literature examined the link between union density or coverage as indicators of the degree of union monopoly power in the market and unemployment (and inflation), and adverse union effects were reported from the outset.
Recognition of transaction costs opens up a number of possibilities for positive union effects at the firm level, including those stemming from potential "hold-up" on the part of the employer.
There are both direct and indirect union effects: the former are caused by the wage tax while the latter stem from the reduction in profits (relevant because of imperfect capital markets).
More potent sources are earnings associated with limited foreign competition and growing firm/industry demand, inter al. Fourth, yet more concern stems from union effects on investments in tangible (i.e., investment) and intangible (R&D) capital.
First, as far as the keynote productivity variable is concerned, union effects are small and to all intents and purposes close to zero on average (see Addison and Hirsch 1989; Hirsch 2004b).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com