Do unions care about low‐paid workers? Evidence from Norway

Abstract

AbstractOne of the core objectives of unions is to raise the wages of the lowest paid. Utilizing a panel of individual‐matched employee–employer data covering the Norwegian private sector in the period 2000–2014, I investigate how workplace union density is related to individual low‐pay risk. By exploiting changes in tax deductions for union members in Norway as a source of exogenous variation, a negative effect of increased union density on low‐pay risk is identified within jobs. The results further suggest that the effect of local bargaining power on individual low‐pay probability is larger among immigrants than among natives.