Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data

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Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data

Author Info

John T. Addison () (University of South Carolina, Universidade de Coimbra/GEMF and IZA Bonn)
Paulino Teixeira () (Universidade de Coimbra and GEMF)

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Abstract

Using international data, we investigate whether the quality of industrial relations matters for the macro economy. We measure industrial relations inversely by strikes – which proxy we cross-check with an industrial relations reputation indicator – and our macro performance outcome is the unemployment rate. Independent of the role of other institutions, good industrial relations do seem to matter: greater strike volume is associated with higher unemployment. Holding country effects constant, however, the sign of the variable is reversed. This fixed-effects result likely picks up a direct effect of strikes, namely, their tendency to rise when striking becomes more attractive to the union.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1968.

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Length: 38 pages
Date of creation: Feb 2006
Date of revision:
Handle: RePEc:iza:izadps:dp1968

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Paper
- John T. Addison & Paulino Teixeira, 2006. "Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data," GEMF Working Papers 2006-02, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-02-12 (All new papers)
NEP-BEC-2006-02-12 (Business Economics)
NEP-MAC-2006-02-12 (Macroeconomics)

References listed on IDEAS
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- Belot, M.V.K. & Ours, J. C. van, 2000. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labour market reforms?," Discussion Paper 40, Tilburg University, Center for Economic Research. [Downloadable!]
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