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19 Table lists the difference between the typical union wage and the nonunion wage of observationally similar workers, as a fraction of the nonunion wage. Source: Lewis (1963, Table 50 and 1986, p. 9) Notice in particular that the union wage gap is about twice as large during the Great Depression (see also Lewis 1963, pp. 4f). The measured wage gap need not be exactly the percentage wedge between MRS and MPL in the union sector. 27 With this, and Lewis’ (1986, p. 9) overestimation caveat, in mind I use the “lower” wage gaps reported in Table 1 as estimates of the MRS/MPL wedges in the union sector.
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A Century of Labor-Leisure Distortions by University of Chicago