Unionization, Labor Market Power, and Wage Inequality

Slow wage growth and growing wage inequality are two major economic policy issues. One possible explanation is that declining unionization and the weakening of labor market institutions, such as minimum wage and employment protection regulation, contribute to these problems. A complementary explanation is that the consolidation of market power among a few large companies has reduced worker compensation. Economists Laurent Bouton, Benjamin Solow, and Lee Tucker will explore the relationship between labor market competitiveness and unionization by analyzing the response of companies to the prospect of unionization and the union election outcome. They will then develop new strategies to estimate the effects of unions on outcomes such as earnings, earnings inequality, and company profits.