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Union Retreat and Regional Economic Performance: the UK in the 1990s

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  • Vassilis Monastiriotis

    (London School of Economics)

Abstract

This paper uses a panel of regional data to investigate the impact that the well-documented decline in trade unionism in the UK had on the economic performance of its regions. The analysis employed here departs from the traditional firm-level and cross-sectional analyses and looks at the economy-wide effects of unionism. Our findings provide evidence in line with theory that predicts unions to increase wages and reduce labour demand, leading to higher unemployment, but they also indicate that unionism is positively related to productivity and incomes, although in all cases the effects are non-linear. We conclude that unionism is not necessarily a burden for the economy, so long that the beneficial wage/productivity effects overbalance the negative effects on employment.

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File URL: http://128.118.178.162/eps/urb/papers/0302/0302006.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Urban/Regional with number 0302006.

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Date of creation: 17 Feb 2003
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Handle: RePEc:wpa:wuwpur:0302006

Note: Type of Document - pdf; prepared on IBM PC; to print on HP;
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Web page: http://128.118.178.162

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Keywords: trade unions; regional economic performance; panel data;

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References

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  1. Miller, Paul & Mulvey, Charles, 1993. "What Do Australians Unions Do?," The Economic Record, The Economic Society of Australia, vol. 69(206), pages 315-42, September.
  2. Booth, Alison L, 1991. "Job-Related Formal Training: Who Receives It and What Is It Worth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 281-94, August.
  3. Richard B. Freeman, 1983. "Unionism, Price-Cost Margins, and the Return to Capital," NBER Working Papers 1164, National Bureau of Economic Research, Inc.
  4. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
  5. Freeman, Richard, 1988. "Union density and economic performance : An analysis of U.S. States," European Economic Review, Elsevier, vol. 32(2-3), pages 707-716, March.
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  8. Machin, S. & Wadhwani, S., 1989. "The Effects Of Unions On Organizational Change, Investment And Employment: Evidence From Wirs," Papers 355, London School of Economics - Centre for Labour Economics.
  9. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-78, June.
  10. Richard B. Freeman, 1980. "Unionism and the dispersion of wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
  11. Blackaby, David H & Murphy, Philip D, 1991. "Industry Characteristics and Inter-regional Wage Differences," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(2), pages 142-61, May.
  12. Blanchflower, David G. & Millward, Neil, 1988. "Trade unions and employment change : An analysis of British establishment data," European Economic Review, Elsevier, vol. 32(2-3), pages 717-726, March.
  13. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers dp0407, Centre for Economic Performance, LSE.
  14. Booth, Alison L & Chatterji, Monojit, 1998. "Unions and Efficient Training," Economic Journal, Royal Economic Society, vol. 108(447), pages 328-43, March.
  15. Reynolds, Morgan O, 1986. "Trade Unions in the Production Process Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 443-47, April.
  16. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December.
  17. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc.
  18. Andrea Bassanini & Ekkehard Ernst, 2002. "Labour Market Institutions, Product Market Regulation, and Innovation: Cross-Country Evidence," OECD Economics Department Working Papers 316, OECD Publishing.
  19. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
  20. Machin, Stephen J & Wadhwani, Sushil, 1991. "The Effects of Unions on Organisational Change and Employment," Economic Journal, Royal Economic Society, vol. 101(407), pages 835-54, July.
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Cited by:
  1. Philippe Martin, 2005. "The geography of inequalities in Europe," Sciences Po publications info:hdl:2441/9283, Sciences Po.

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