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ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
Recall the nonunion/union wage ratio.
Next, separately calculate average wages for unionized and nonunion workers in the northeast, midwest, south, and west. Then, recalculate the nonunion/union wage ratio for unionized and nonunion workers in the same region.
Also, separately calculate average wages for unionized and nonunion workers in the manufacturing, trade, and healthcare industries. Then, recalculate the nonunion/union wage ratio for unionized and nonunion workers in the same industry.
How does the nonunion/union wage ratio change when you compare workers in the same region and workers in the same industry?
ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
The nonunion/union wage ratio in the oversampled data set is about 87 percent.
ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
To get separately the average wages for unionized workers and nonunionized workers by region, first create new wage variables for each type of worker in each region and then calculate the sample average for each worker category.
Since there are four regions, this will be a total of 8 new wage variables.
The nonunion average wage divided by the average wage for unionized workers will be the nonunion/union wage ratio.
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ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
Here is one example: the wage variable is in column A, the union dummy variable is in column B, and the northeast variable is in column N, so the new wage variable for workers in unions in the northeast is calculated as (type—or cut and paste—this command in each row of a new column)
=if(B2=1,if(N2=1,A2,false)).
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ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
Here is another example: the wage variable is in column A, the union dummy variable is in column B, the northeast variable is in column N, the south variable is in column O, and the west variable is in column P, so the new wage variable for nonunionized workers in the midwest is calculated as
=if(B2=0,if(N2=0,if(O2=0,if(P2=0,A2,false)))).
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ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
Here are the answers using my data:
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Variable Average Minimum Maximum
NortheastUnionWage 24.87 3.00 100.00
NortheastNonunionWage 21.73 3.00 100.00
MidwestUnionWage 21.38 3.00 100.00
MidwestNonunionWage 19.75 3.00 100.00
SouthUnionWage 21.09 3.00 100.00
SouthNonunionWage 18.93 3.00 100.00
WestUnionWage 25.50 3.00 78.52
WestNonunionWage 22.42 3.00 100.00
ManufacturingUnionWage 20.41 3.00 44.71
ManufacturingNonunionWage 21.44 3.00 100.00
TradeUnionWage 17.41 7.25 45.67
TradeNonunionWage 17.59 3.00 100.00
HealthcareUnionWage 20.77 3.00 78.52
HealthcareNonunionWage 20.19 3.00 100.00
Northeast Nonunion/Union Wage Ratio 0.87
Midwest Nonunion/Union Wage Ratio 0.92
South Nonunion/Union Wage Ratio 0.90
West Nonunion/Union Wage Ratio 0.88
Manufacturing Nonunion/Union Wage Ratio 1.05
Trade Nonunion/Union Wage Ratio 1.01
Healthcare Nonunion/Union Wage Ratio 0.97
ECON 4510/5510 Unions and Collective Bargaining:
Data Assignment 6
One reason why union workers earn more than nonunion workers on average is that workers in the northeast and west are more likely to be in unions and workers in those areas earn higher wages. Workers in the south are less likely to be in unions and earn lower wages.
So, when comparing union and nonunion workers in the same region, the nonunion/union wage ratio increases (the wage differences decrease) because regional differences in wages are held constant.
The same is true for industry. Some industries with relatively high wages have relatively high rates of unionization. When comparing union and nonunion workers in the same industry, the nonunion/union wage ratio increases (wage differences decrease) because industry differences in pay are held constant.