We’re capping off our Spring 2025 Stone Inequality Seminars with a presentation from Lorenzo Lagos, Assistant Professor of Economics at Brown University and a research fellow of the Institute of Labor Economics (IZA). Lagos will be presenting his paper, titled “Union-Specific Rents and Inequality.”
Abstract
We study the role of union heterogeneity in explaining wage inequality. Using job moves across multi-firm unions in linked employer-employee data from Brazil, we estimate the pay premiums of over 4,800 unions. We find that union-specific rent extraction accounts for 3-4% of variation in earnings—similar to the role of industry and local labor markets combined. Correlating these rent estimates to a rich set of union attributes, we find that unions with higher premiums tend to engage in strikes, successfully negotiate CBAs, have collective governance structures with internal competition, and elect skilled leaders who are similar to the rank-and-file. The heterogeneity in premiums across unions is substantial (standard deviation of 3-7 log points) and matters for workers, e.g., comparing markets with effective vs. ineffective unions around a labor reform that weakened unions reveals a 2.3 log point decrease in wages. Turning our focus to gender and racial wage gaps, unions exacerbate these gaps (on average) primarily because of within-union differential rent-sharing between groups. We document heterogeneity in union-specific rent-sharing as well, showing that unions with blue-collar leaders tend to compress these gaps.
Event Details
Date: May 6, 2025
Time: 3:30 – 5:00pm
Location: Iona 533, 6000 Iona Dr, Vancouver, BC
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Lorenzo Lagos is an Assistant Professor of Economics at Brown University and a research fellow of the Institute of Labor Economics (IZA). His research interests are in labor economics and development economics. Recently, Prof Lagos has focused on labor markets in Brazil, studying the role of firms in racial wage differentials, the impact of union priorities on female-friendly work environments, and the effects of minimum wages and collective bargaining. Prof Lagos received his PhD from Columbia University in 2020.