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The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds

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  • Pedro S. Martins

Abstract

Employee representatives in firms are a potentially key but not yet studied source of the impact of unions and works councils. Their actions can shape multiple drivers of firm performance, including collective bargaining, strikes, and training. This paper examines the impact of union rep mandates by exploiting legal membership thresholds present in Portugal: for instance, while firms employing up to 49 union members are required to have one union rep, this increases to two (three) union reps for firms with 50 to 99 (100-199) union members. Drawing on matched employer-employee data on the unionised sector and regression discontinuity methods, we find that a one percentage point increase in the legal union rep/members ratio leads to an increase in firm performance of at least 7%. This result holds across multiple dimensions of firm performance and appears to be driven by increased training. However, we find no effects of union reps on firm-level wages, given the predominance of sectoral collective bargaining.

Suggested Citation

  • Pedro S. Martins, 2018. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," Working Papers 93, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:93
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    Citations

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    Cited by:

    1. Filippo Belloc & Gabriel Burdin & Fabio Landini, 2023. "Advanced Technologies and Worker Voice," Economica, London School of Economics and Political Science, vol. 90(357), pages 1-38, January.
    2. Wenjing Duan & Pedro S. Martins, 2022. "Rent sharing in China: Magnitude, heterogeneity and drivers," British Journal of Industrial Relations, London School of Economics, vol. 60(1), pages 176-219, March.
    3. Pedro S. Martins & Jonathan P. Thomas, 2023. "Employers’ associations, worker mobility, and training," Nova SBE Working Paper Series wp653, Universidade Nova de Lisboa, Nova School of Business and Economics.
    4. Martins, Pedro S., 2021. "Employee training and firm performance: Evidence from ESF grant applications," Labour Economics, Elsevier, vol. 72(C).
    5. Pedro S. Martins, 2020. "Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund," GEE Papers 0152, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2020.
    6. Burdin, Gabriel & Kato, Takao, 2021. "Complementarity in Employee Participation Systems," GLO Discussion Paper Series 968, Global Labor Organization (GLO).
    7. Clément Brébion, 2021. "The works council wage premium in Germany: a case of strategic discrimination?," Working Papers halshs-03100169, HAL.
    8. Thommen, Yann, 2022. "Reforms of collective bargaining institutions in European Union countries: Bad timing, bad outcomes?," European Journal of Political Economy, Elsevier, vol. 71(C).
    9. Pedro S. Martins, 2021. "30,000 Minimum Wages: The Economic Effects of Collective Bargaining Extensions," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 335-369, June.
    10. Burdin, Gabriel & Kato, Takao, 2021. "Complementarity in Employee Participation Systems: International Evidence," IZA Discussion Papers 14694, Institute of Labor Economics (IZA).
    11. Martins, Pedro S., 2020. "What Do Employers' Associations Do?," IZA Discussion Papers 13705, Institute of Labor Economics (IZA).
    12. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2022. "Robots, Digitalization, and Worker Voice," GLO Discussion Paper Series 1038, Global Labor Organization (GLO).
    13. Pierre Cahuc & Pauline Carry & Franck Malherbet & Pedro S. Martins, 2023. "Spillover effects of employment protection," Nova SBE Working Paper Series wp655, Universidade Nova de Lisboa, Nova School of Business and Economics.
    14. Martins, Pedro S. & Saraiva, Joana, 2020. "Assessing the legal value added of collective bargaining agreements," International Review of Law and Economics, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    Firm Performance; Union Delegates; Collective Bargaining.;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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