Union effects on pay levels in Britain

The contraction of union representation in Britain raises the question of whether or not unions still achieve a wage premium. Analysis of matched employer-employee data from the 1998 Workplace Employee Relations Survey shows that there is now no demonstrable premium for private sector workers in general. However, unions do achieve a wage premium of around 9% for about half of employees covered by collective bargaining arrangements. The effect of union bargaining spills over to other employees in the same workplaces. The paper identifies circumstances where union effects are strongest-employer endorsement of union membership, high collective bargaining coverage and multi-unionism. (C) 2002 Elsevier Science B.V. All rights reserved.