Union wage effect: Evidence from Ghana
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Date
2023
Journal Title
Journal ISSN
Volume Title
Publisher
Cogent Economics & Finance
Abstract
Consistent with Convention 87 of the International Labour
Organization (ILO), Section 79 of the Labour Act, 2003 (Act 651) empowers every
employee in an organization to either form or join a trade union of their choice
for the promotion and protection of their economic and social interests. In spite
of this legal provision, union coverage and density in Ghana have continually
declined in recent years. The decline in union density and coverage is likely to
decrease the collective bargaining strength of unions. It is against this back ground that our study seeks to examine the effect of unions’ bargaining (proxied
by union presence variable) on wages in Ghana. We employ the Heckman
Selection Model and quantile regression technique to analyze data extracted
from the sixth round of the Ghana Living Standards Survey (GLSS 6) and 2015
Ghana Labour Force Survey (GLFS 2015) respectively. The findings indicate that
unions’ bargaining effect on wages is positive. Furthermore, the study finds that
the union wage premium is highest at the lowest point of the wage distribution
(25th quantile) but lowest at the highest point of the wage distribution (75th
quantile). Whilst the study acknowledges the importance of education in earn ings determination, we recommend that low-wage employees in a non-union
establishment should join a trade union in order to earn a living/decent wage
Description
Research Article
Keywords
Unions, Collective Bargaining, Wages, Labour Act, Ghana