Union wage premiums in Great Britain: coverage or membership?

Publication type

Journal Article


Publication date

June 1, 2007


This paper presents estimates of union wage premiums for Great Britain and distinguishes between union membership and union coverage effects on wages. For this purpose a panel data system estimator is applied to data from the British Household Panel Survey.
For female workers a coverage premium of 6.1% is estimated whilst no evidence of a union membership premium is found. This result lends support to the by-product theory of Olson (1965) [Olson Jr., M., 1965. The logic of collective action. Harvard University Press, Cambridge (Mass.)]: if female covered members receive other private benefits than a higher wage from the union the coverage premium could be viewed as a by-product. For male workers no evidence is found of a membership premium nor a coverage premium. To investigate potential bias in the estimated union effects particular attention is paid to measurement error in union membership and the inclusion of job-changes in the sample.

Published in

Labour Economics


Volume: 14 (1):53-71





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