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Redundancy Pay, Unions and Employment

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  • Booth, Alison L
  • McCulloch, Andrew

Abstract

In this paper, the authors estimate the determinants of bargaining over redundancy pay, and its impact on employment variation and financial performance, using the 1990 Workplace Industrial Relations Survey. The estimates indicate that bargaining over redundancy pay is more prevalent in plants with a strong union presence. However, voluntary negotiation of redundancy pay does not appear to reduce employment variability in the face of small demand shocks. Bargaining over manual redundancy pay has an insignificant impact on plants' financial performance, while bargaining over nonmanual redundancy pay has a large significant positive effect. The authors' findings may explain the positive attitudes to redundancy pay reported by some employers, and reinforce the general conclusion of cross-country studies that firing constraints in Britain may be relatively unimportant in preventing labor market flexibility. Copyright 1999 by Blackwell Publishers Ltd and The Victoria University of Manchester

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Bibliographic Info

Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 67 (1999)
Issue (Month): 3 (June)
Pages: 346-66

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Handle: RePEc:bla:manchs:v:67:y:1999:i:3:p:346-66

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Cited by:
  1. Addison, John T. & Teixeira, Paulino, 2004. "The Effect of Worker Representation on Employment Behavior in Germany: Another Case of -2.5%," IZA Discussion Papers 1188, Institute for the Study of Labor (IZA).
  2. José Enrique Galdón Sánchez & Maia Güell, 2001. "Dismissal conflicts and unemployment," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0105, Departamento de Economía - Universidad Pública de Navarra.
  3. Alex Bryson & Michael White, 2006. "Unions, within-workplace job cuts and job security guarantees," LSE Research Online Documents on Economics 19849, London School of Economics and Political Science, LSE Library.
  4. Addison, John T. & Siebert, W. Stanley, 2002. "Changes in Collective Bargaining in the U.K," IZA Discussion Papers 562, Institute for the Study of Labor (IZA).
  5. John T. Addison & Paulino Teixeira, 2005. "The Effect of Works Councils on Employment Change," GEMF Working Papers 2005-06, GEMF - Faculdade de Economia, Universidade de Coimbra.
  6. Michael White & Alex Bryson, 2006. "Unions, job reductions and job security guarantees: the experience of British employees," LSE Research Online Documents on Economics 19841, London School of Economics and Political Science, LSE Library.
  7. Addison, John T. & Belfield, Clive R., 2002. "Unions and Employment Growth: The One Constant?," IZA Discussion Papers 479, Institute for the Study of Labor (IZA).
  8. Laszlo Goerke, 2002. "Redundancy Pay and Collective Dismissals," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 68-, February.
  9. Addison, John T. & Belfield, Clive R., 2002. "Unions and Establishment Performance: Evidence from the British Workplace Industrial/Employee Relations Surveys," IZA Discussion Papers 455, Institute for the Study of Labor (IZA).

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