The Impact of Unions on Wages in the Public Sector: Evidence from Higher Education

Abstract

This paper studies the effects of unionization on the salaries of Canadian university faculty between 1970-2022.The evidence indicates that unionization increases salaries on average by 2 percent in the first year post-unionization and by 6 percent after 6 years.These gains are driven largely by wage increases in the bottom half of the salary distribution, and stem from the introduction of salary floors.The results further reveal that these effects are primarily concentrated between 1970 and 1995 and they are financed by an increase in student enrollment.We do not find any impacts on employment, tuition or government transfers.

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