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An Analysis of Public- and Private-Sector Wages Allowing for Endogenous Choices of Both Government and Union Status

Joseph Gyourko and Joseph Tracy
Journal of Labor Economics
Vol. 6, No. 2 (Apr., 1988), pp. 229-253
Stable URL: http://www.jstor.org/stable/2535043
Page Count: 25
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An Analysis of Public- and Private-Sector Wages Allowing for Endogenous Choices of Both Government and Union Status
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Abstract

A general selection model is estimated in which workers select across four labor markets-private/nonunion, private/union, public/nonunion, and public/union. Evidence is found of positive selection bias in the private/nonunion sector and of negative selection bias in the public/union sector. Union wage differentials in the public and private sectors as well as public/private wage differentials are then calculated. Two different types of wage differentials are contrasted. We discuss when it is appropriate to use each type of differential.

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