Job Satisfaction, Wages, and Unions

This paper provides a systematic empirical analysis of the effect of union membership on job satisfaction and wages, and shows how the interaction between these effects leads to empirically observable relations between unionization and individual quit probabilities. Using the National Longitudinal Survey of Mature Men, several empirical results were obtained. First, union members, on average, report lower levels of job satisfaction. Interestingly, unionization causes greater dissatisfaction at higher tenure levels. These findings are attributed to both the politicization of the unionized labor force and the fact that union members face flatter earnings profiles. The importance of the latter effect is reflected by the empirical fact that unions have a strong negative effect on quit probabilities at low levels of tenure, but the effect diminishes (absolutely) as tenure increases.