Seniority profiles in unionised workplaces:Do unions still have the edge?

Abstract

This paper, using data from the British Household Panel; Survey, explores how institutional arrangements influence employees’ wages. Particularly, it distinguishes the different paths seniority-earnings profiles follow depending on whether the individual is employed in a workplace where trade unions and collective bargaining are present, or not. Within this framework, two propositions are set. It is argued that in the union sector seniority should be an important determinant of wages, while in the less structured non-union sector true productivity, proxied by the more competitive accumulated skills and professional expertise, should have a key role on earnings profiles. Indeed the empirical analysis on male employees verifies both propositions. Seniority-earnings profiles appear to be steeper in the union-sector, while occupational expertise is estimated to have a more significant role in non-union jobs.