The effects of trade union membership on earnings: The case of Kenya
Thinguri, Andrew Mukui
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The main objective of trade unions is improvement of the welfare and the protection of the terms and conditions of employment of their members. Two of the most important terms unions negotiate are wages and other benefits (e.g. health insurance and pensions). As a result, differentials in wage and benefits between union and nonunion employees of similar human capital are considered an important measure of union power. This differential is normally called the union earnings premium, the size of which varies from country to country and from industry to industry. Although there is existing literature on the wage premium in Kenya, there is limited information on the effects of unions on total earnings, which includes wages and other pecuniary benefits, since nonwage pecuniary benefits may constitute a large portion of employees' compensation. The objective of this study is to investigate the effects of union membership on both wage and nonwage pecuniary benefits of employees. The estimated union earnings premium was around 23%. There was asymmetry in the union earnings premium, with the lower end of the distribution having a higher union earnings premium, and the upper end of the distribution having a negligible premium.