Union effects on earnings dispersion in Australia, 1986-1994

In Australia a large decline in union density has occurred since the mid-1970s. This paper examines the effect of the decline in union density on the dispersion of earnings in Australia between 1986 and 1994. Changes in union density are found to have increased earnings dispersion for male employees over this period, but do not appear to have had a strong effect on earnings dispersion for female employees. The main cause of changes in earnings dispersion for both male and female employees has been an increase in the dispersion of earnings of non-union employees.