Using a simultaneous equations model of wages and union membership, the elasticity of the wage with respect to market concentration is estimated to be approximately 0.2. The estimate uses a large data set and extensive controls to measure concentration's direct effect on the wage, an indirect effect through unionization, and a feedback effect. The indirect effect represents the majority of concentration's effect.

Recent confirmation of sheepskin effects in the returns to education for prime age white males has been taken as evidence of screening or signaling in the labor market. The authors report evidence of sheepskin effects among women and minority males, and demonstrate that they are somewhat smaller for lower diploma years, but larger for higher diploma years, than those of white males. These are among the first broad-based results confirming the frequent contention derived from signaling models that minorities have smaller returns to low productivity signals, but larger returns to high productivity signals.

A variance components model explains wage dispersion with a specific version of generalized least squares. The estimation preserves individual data while examining the influence of union penetration on dispersion in both the union and nonunion sectors. Controlling for both individual and industry characteristics and for the endogeneity of wages, union penetration correlates strongly with reduced dispersion in the union sector but not in the nonunion sector. A decomposition reveals the relative importance of the influences of union penetration and of union membership.