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Time series evidence on union densities in European countries

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Author Info
Daniele Checchi ()

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Abstract

We follow a business cycle approach to study the determinants of union density, finding evidence ofnegative effects of labour market slack (proxied by unemployment) and some impact of compositionaleffects (negative impact of increased labour market participation, as measured by the employment rates, and positive effect of educational attainment in the population, as measured by the population with secondary degrees or more). For a subset of countries we also show that the sectoral changing composition (decline of industry and increase in private services) and increased flexibility in the labour market (as measured by temporary workers) have an adverse effect on density. This pattern is common to all 14 European countries under analysis, with national variations due to inflation rates, wage shares on value added, unemployment subsidies and government political orientation. However Nordic countries distinguish themselves from the common pattern in that they exhibit a positive long-term relationship between union density and unemployment. This may possibly be explained by the fact that Nordic unions provide services to unemployed workers (the so-called Ghent system: mainly administration of unemployment benefits, but also job counselling and general training). The general model is robust enough to appear even when we consider Europe as a single labour market and aggregate national membership as if it were a single union.

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Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number 2000-10.

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Date of creation: 01 Jan 2000
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Handle: RePEc:mil:wpdepa:2000-10

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  2. Grossman, Gene M, 1983. "Union Wages, Temporary Layoffs, and Seniority," American Economic Review, American Economic Association, vol. 73(3), pages 277-90, June. [Downloadable!] (restricted)
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  7. Richard Freeman & Jeffrey Pelletier, 1991. "The Impact of Industrial Relations Legislation on British Union Density," NBER Working Papers 3167, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Blanchflower, D. & Crouchley, R. & Estrin, S. & Oswald, A., 1990. "Unemployment And The Demand For Unions," Papers 372, London School of Economics - Centre for Labour Economics.
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  9. Holmlund, Bertil & Lundborg, Per, 1996. "Wage Bargaining, Union Membership, and the Organization of Unemployment Insurance," Working Paper Series 1996:17, Uppsala University, Department of Economics.
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  13. Corneo, Giacomo G., 1997. "The theory of the open shop trade union reconsidered," Labour Economics, Elsevier, vol. 4(1), pages 71-84, March. [Downloadable!] (restricted)
  14. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March. [Downloadable!] (restricted)
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  15. Burda, Michael C, 1990. "Membership, Seniority and Wage-Setting in Democratic Labour Unions," Economica, London School of Economics and Political Science, vol. 57(228), pages 455-66, November. [Downloadable!] (restricted)
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