Trade Union Decline and the Distribution of Wages in the UK: Evidence From Kernel Density Estimation.

The paper take an alternative approach to the estimation of the impact of unionization on wages in Great Britain. Instead of focusing on the effect of changes in unionization on the conditional mean and variance of wages, it evaluates the effect on the entire wage distribution. Such an approach enables to illustrate not just the average effect of unionization but also where in the wage distribution the effects are particularly felt. It then shows how these nonparametric techniques can be extended to assess the impact of union decline on the observed shifts in the wage distribution over time. It assesses the available evidence of the effect of unions on the wage distribution and the consequences of declining union power. It discusses the kernel density estimation and explains how to generate counterfactual densities. It describes the data from the Family Expenditure Survey and presents kernel estimates of the density of hourly wages for men over the period 1982-93. It also presents some measures of wage inequality which show significant increases over the period. It uses data from an alternative data set, the National Child Development Study, to illustrate the robust nature of the findings. The paper also uses data from the General Household Survey and the British Household Panel Survey which allow to identify union coverage in addition to union membership.