Do Unions Increase Labor Shares? Evidence from US Industry-Level Data

Andrew T. Young, Hernando Zuleta

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


We explore the relationship between union membership rates and labor shares using panel data on 35 industries, spanning the entire US economy, for the years 1983–2005. For the full sample, a standard deviation increase in union membership rates is associated with an increase in an industry’s labor share of about 10%. Starting from the mean labor share in our sample (0.614), this effect amounts to about 6 percentage points. However, the effect is weaker and not statistically significant for manufacturing industries. We control for the capital-to-output ratio in all of our estimations, and the results are consistent with an elasticity of substitution between capital and labor that is less than unity. As such, the positive union effect on labor share is consistent with either the right-to-manage or the efficiency bargaining model of unions.

Original languageEnglish
Pages (from-to)558-575
Number of pages18
JournalEastern Economic Journal
Issue number4
StatePublished - Sep 1 2018


  • E25
  • J20
  • J51
  • capital share
  • income distribution
  • labor demand
  • labor market institutions
  • labor share
  • labor unions
  • trade unions


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