Union Membership Effect on Wage Premiums: Evidence from Organized Manufacturing Industries in India

16 Pages Posted: 13 Oct 2008

See all articles by Amit K. Bhandari

Amit K. Bhandari

RBC College; IZA Institute of Labor Economics

Abstract

Trade unionism is a legislative system of organizing workers and raising voices for economic and social goods. As the process of global integration deepens the labour market become more flexible and fragmented, rendering collective organization more and more difficult. In this backdrop, the paper attempted to analyse the impact of union membership on wages in the organised manufacturing industries in India. The study uses a recent survey data on labour market in the organised manufacturing industries. The estimated wage premiums for union membership for permanent and contract workers are 56.7 per cent and 10.3 per cent respectively. Decomposing this wage gap indicates that union membership contributes majority of the wage differentials, indicating that unions able to reserve higher premium for their members. In general, it refutes the problem of free riding the benefits in the organized manufacturing industries in India.

Keywords: trade unions, wage differentials, manufacturing

JEL Classification: J51, J31, L60

Suggested Citation

Bhandari, Amit K., Union Membership Effect on Wage Premiums: Evidence from Organized Manufacturing Industries in India. IZA Discussion Paper No. 3747, Available at SSRN: https://ssrn.com/abstract=1282969 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Amit K. Bhandari (Contact Author)

RBC College ( email )

Naihati
North 24 Parganas
Naihati, 743134
India

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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