This study examines the impact of unions on wages and employment using data from Uruguay in a period where unions were banned (1973-1984), then legalized with tripartite bargaining (1984-1991) followed by industry-wide or firm-specific bargaining (1992-1997). The relationship between wages and employment shifted significantly across these periods as evidenced by - Recursive residuals show structural shifts in five of six industries with the shifts coming at the same time as the regime changes. - Wages are exogenous to employment before 1985, but not afterwards. - The wage elasticity and the employment-output elasticity fell sharply after 1984. - Unions significantly raised wages in 1985-1992, but afterwards the change in bargaining structure and increased openness led to concessions. - Starting in 1985, workers in unionized industries were less likely to be laid off than workers in nonunion industries.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7501.
Length: Date of creation: Jan 2000 Date of revision: Publication status: published as forthcoming, a conference volume by the Interamerican Development Bank,edited by Carmen Pages (title of volume unknown). Handle: RePEc:nbr:nberwo:7501
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Find related papers by JEL classification: J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
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