A new article examines the relationship between union density and wage inequality within Norwegian establishments observed in the period 2000–2018. The main finding is that increases in the union density result in lower wage inequality within workplaces, both in the short and long term.
The findings also suggest that greater wage inequality in one period is associated with increased union density in the next period.
The latter finding contradicts the hypothesis that union members opt out or refrain from joining the union if inequality increases.
These contrasting findings can be explained by various mechanisms that take place in decentralized negotiation regimes versus the Norwegian system, which has a stronger element of centralized negotiation.
