Association for Public Policy Analysis & Management

While there is a large and active literature on the effects of collective bargaining rights on average earnings, there are relatively fewer studies that empirically estimate the impact of such rights on wage distribution among public-sector workers. From a recently developed unconditional quantile regression (UQR). I make two contributions to the empirical policy analysis literature on public sector collective bargaining. First, I argue that UQR is much more suitable in policy analysis as it measures the impact of the policy on quantiles of the unconditional distribution of wage, rather than the conditional quantile. Second, I use two sets of nationally representative data and find that collective bargaining law and ensuing unionization increases the wage inequality among public sector workers. The OLS regression show an imprecise positive relationship between state collective bargaining law and worker compensation, while UQR estimates reveal a heterogeneity depending on the quantile of distribution. Specifically, I found positive and significant impact of CB laws on the bottom quantile, while I found negative and statistically significant impact on the top quantile. For teachers, however, I find opposite results and conclude that collective bargaining decompresses wage distribution.