The Union Wage Effect in Late Nineteenth Century Britain

This paper gives a historical dimension to the impact of trade unions on earnings by estimating the union wage effect in Britain between 1889-90 using data from the US Commissioner of Labour survey conducted at that time. The determinants of union status are also investigated in terms of profit estimation using individual characteristics which may be correlated with union membership. The results of this first stage are used in the computation of selectivity-corrected estimates of the union wage effect. It is found that the effect of union membership on earnings at this time was in the order of 15-20% for a range of different skill levels.