Suppose a study finds than union wages are 10% higher than nonunion wages. This will likely understate the true advantage of working in the union job when

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When workers losing union jobs seek out non-union jobs, they may be taking a pay cut to do so. Therefore, they are likely to be lower-skilled workers who are willing to accept lower wages. Thus, the wage advantage of unionized jobs is likely to be higher than indicated in the study. The other options (A, B, and D) suggest that the true advantage of union wages may be lower than indicated in the study.

Suppose a Study Finds Than Union Wages Are 10% Higher