TRADE UNION DECLINE AND THE DISTRIBUTION OF WAGES IN THE UK: EVIDENCE FROM KERNEL DENSITY ESTIMATION

Brian D. Bell

Nuffield College and Institute of Economics and Statistics

and

Michael K. Pitt

Nuffield College and Department of Statistics

 

 

November 1995

 

Abstract

This paper assesses the impact of changes in union density on the male wage structure in the UK over the period 1982-1993. Using data from the Family Expenditure Survey, 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% 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.