The RFBerlin Applied Economics Seminar series brings leading researchers to Berlin to share their latest work and engage with our community. We are delighted to host Lorenzo Lagos (Brown University) for this session, where he will present his working paper on “Union-Specific Rents and Inequality”.

Event Topic:

Union-Specific Rents and Inequality (with Ellora Derenoncourt, François Gerard, and Claire Montialoux)

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: 21 May 2025
Time: 14:00–15:15

Participation: The seminar is open to the public and primarily intended for an academic audience.

If you have any questions or need further information, feel free to contact us using the form or email us at [email protected]