Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 7/2021: Understanding the Decline in Private Sector Unionization: A Skill-based Approach

Samuel Dodini (), Michael Lovenheim () and Alexander Willén ()
Additional contact information
Samuel Dodini: Cornell University
Michael Lovenheim: Cornell University
Alexander Willén: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: Private-sector unionization rates have fallen precipitously in the United States over the past half century, from 25% in 1973 to only 7% in 2018. We take a skill-based approach to studying this decline, using data from the Current Population Survey combined with occupation-specific task requirements from the Dictionary of Occupational Titles and the Occupational Information Network. We find that for both men and women, private sector unionized jobs became higherskilled by requiring more non-routine, cognitive skills and fewer manual or routine skills. We further show that union, non-union skill differences have polarized, with unionized worker occupations becoming relatively more intensive in non-routine, cognitive skills and in manual/routine skills. These changes have been more pronounced for women than for men. Next, we decompose these skill changes into three parts: (1) changes in skills within an occupation, (2) changes in worker concentration across existing occupations, and (3) changes to the occupational mix from both entry and exit. Most of the skill changes we document are driven by the second two forces. The third part of the analysis estimates union wage premiums that account for changing skill mix. We find that accounting for skills has a small effect on the union wage premium and that the premium remains high at over 20% for both men and women. Finally, we show how this evidence can be reconciled with a model of skill-biased technological change that explicitly accounts for the institutional framework surrounding collective bargaining.

Keywords: Private-sector; unionization

JEL-codes: J00

65 pages, March 11, 2021

Full text files

2732885 PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Karen Reed-Larsen ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2021-03-11 13:19:24.