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Labor unions, union density and the union wage premium
The influence of trade unions’ activity in the Portuguese labor market is reviewed, resorting to the information provided by around 200 000 firms on the number of unionized workers. In particular, the membership determinants are studied; the workers’ wage benefit in more unionized firms is estimated; and the wages’ compositional changes, due to different levels of firm’s unionization, are revealed.As in other developed countries, Portugal has recorded a steady erosion of the union representation. For 2010, the estimate of the union density in the private sector of the economy is around 11 percent. The union presence is more important in sizeable firms, when the company’s equity is public, and in industries sheltered from competition. The unionized workers benefit from a substantial wage premium. In more unionized firms, this gap reaches levels above 30 percent, in contrast with non-unionized firms, with the same observed characteristics, that work in the same industry and region.