Specification issues in the modelling of union status determination

Abstract

This paper investigates the relationship between econometric and variable specification in a model of union status determination. In a departure from the union membership literature, it is hypothesized that the industrial characteristics should not affect union status determination directly, but rather through bargained wages. A data set which combines personal and industrial characteristics is used to examine these issues. It is found that if sample selection into union jobs is controlled for, the industrial variables add no explanatory power to the union status equations, although they are important in the wage equations.