Unions and wage inequality: The roles of gender, skill and public sector employment

Abstract We examine the changing relationship between unionization and wage inequality in Canada and the United States. Our study is motivated by profound recent changes in the composition of the unionized workforce. Historically, union jobs were concentrated among low‐skilled men in private sector industries. With the steady decline in private sector unionization and rising influence in the public sector, half of unionized workers are now in the public sector. Accompanying these changes was a remarkable rise in the share of women among unionized workers. Currently, approximately half of unionized employees in North America are women. While early studies of unions and inequality focused on males, recent studies find that unions reduce wage inequality among men but not among women. In both countries, we find striking differences between the private and public sectors in the effects of unionization on wage inequality. At present, unions reduce economy‐wide wage inequality by less than 10%. However, union impacts on wage inequality are much larger in the public sector. Once we disaggregate by sector, the effects of unions on male and female wage inequality no longer differ. The key differences in union impacts are between the public and private sectors—not between males and females.