The Effect of International Competition on Union and Nonunion Wages

Abstract

Using data from the May 1975 to 1981 Current Population Surveys, the authors examine the impact of international competition on union and nonunion wages. Two findings emerge from the study. First, international competition, measured by import share, was a significant determinant of union and nonunion wages: a 10% rise in the import share lowered the union wage differential by about 2%. Second, the net negative effect of a given import share on both union and nonunion wages decreased sharply in absolute magnitude as the percentage organized increased.

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