Unions, Wages, and Skills

Studies uniformly conclude that union wage effects are largest for workers with low measured skills. Longitudinal analysis using 1989/90-1994/95 CPS matched panels produces union premium estimates equivalent across skill groups, following appropriate sample restrictions and control for worker- specific skills. NLSY evidence on aptitude scores confirms that union workers with high measured skills have relatively low unmeasured skills. Differential selection by skill class and skill homogeneity in union workplaces result from employer and employee sorting in response to wage standardization, union organizing where skills are homogeneous, and unionized employers ' reluctance to hire the most as well as least able workers.