Do minimum wages crowd out union density?

Abstract

Minimum wage legislation has spread across richdemocracies in recent decades in response to risinginequality and in-work poverty. However, there are con-cerns that state regulation of wages could reduce incen-tives to join a union. We empirically test this crowdingout hypothesis, using (1) an event-study macro-levelanalysis of trade union density in 19 advanced capital-ist countries between 1960 and 2017 and (2) a multi-levelanalysis of 32 countries (1981−2020) where we useindividual-level union membership as dependent vari-able. We find no evidence that statutory minimum wageadoption crowds out union density. We also test whetherthe most vulnerable groups of employees (young, low-skilled and low-income) have a lower propensity to joina union when a minimum wage is introduced but find no effect either.