Han, Eunice

“How Does Declining Unionism Affect the American Middle Class and Inter-generational Mobility?”
Richard B. Freeman, Eunice Han, Brendan Duke, and David Madland. 2016. ““How Does Declining Unionism Affect the American Middle Class and Inter-generational Mobility?”” Federal Reserve Bank, 2015 Community Development Research Conference Publication.Abstract
This paper examines unionism’s relationship to the size of the middle class and its
relationship to intergenerational mobility. Panel Study of Income Dynamics (PSID) 1985
and 2011 files are used to examine the change in the share of workers in a middle-income
group (defined by persons having incomes within 50 percent of the median) and use a
shift-share decomposition to explore how the decline of unionism contributes to the
shrinking middle class. The files are also used to investigate the correlation between
parents’ union status and the incomes of their children. Additionally, federal income tax
data is used to examine the geographical correlation between union density and
intergenerational mobility. Findings include that union workers are disproportionately in
the middle-income group or above, and some reach middle-income status due to the
union wage premium; the offspring of union parents have higher incomes than the
offspring of otherwise comparable non-union parents, especially when the parents are
low-skilled; and offspring from communities with higher union density have higher
average incomes relative to their parents compared to offspring from communities with
lower union density. These findings show a strong, though not necessarily causal, link
between unions, the middle class, and intergenerational mobility.