Unionization and the Pattern of Nonunion Wages: Evidence for the UK

This paper presents the first examination of the effect of unionisation on the distribution of nonunion wages in the UK. We test a hypothesis that has received considerable attention in the US: that the threat of unionisation leads nonunion firms to increase the earnings of their lowest paid workers, so compressing their internal wage distribution. In aggregate we find little support for this hypothesis in the UK and suggest that the supportive evidence from the US may be a function of the absence of suitable linked employer‐employee data.