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Trade Union Density and Inflation Performance: Evidence from OECD Panel Data

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  • C. BOWDLER
  • L. NUNZIATA

Abstract

This paper examines the impact of union membership rates on inflation in OECD countries. A positive effect of union density is estimated, even after controlling for fixed effects and time dummies. Additional institutional characteristics, for example union coordination, employment protection laws and central bank independence, do not affect inflation directly in a panel setting, but do influence the size of the unionization coefficient via interaction terms. The results are robust to controlling for potential common causes such as oil price shocks and the political stance of the government, and to using GMM/IV techniques to handle possible endogeneity biases. Copyright (c) The London School of Economics and Political Science 2006.

Suggested Citation

  • C. Bowdler & L. Nunziata, 2007. "Trade Union Density and Inflation Performance: Evidence from OECD Panel Data," Economica, London School of Economics and Political Science, vol. 74(293), pages 135-159, February.
  • Handle: RePEc:bla:econom:v:74:y:2007:i:293:p:135-159
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    Cited by:

    1. Daniele Checchi & Cecilia García-Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    2. Tahir Mukhtar, 2010. "Does Trade Openness Reduce Inflation? Empirical Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(2), pages 35-50, Jul-Dec.
    3. Magali Jaoul-Grammare & Isabelle Terraz, 2010. "Syndicalisation et croissance économique : y a-t-il une exception française ?," Working Papers of BETA 2010-25, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Colombo, Emilio & Tirelli, Patrizio & Visser, Jelle, 2014. "Reinterpreting social pacts: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 358-374.
    5. Christoph S. Weber, 2016. "Central Bank Transparency and Inflation (Volatility) – New Evidence," Working Papers 163, Bavarian Graduate Program in Economics (BGPE).
    6. repec:kap:iecepo:v:15:y:2018:i:1:d:10.1007_s10368-016-0365-z is not listed on IDEAS
    7. Ciżkowicz, Piotr & Rzońca, Andrzej, 2010. "Inflation and corporate investment in selected OECD countries in the years 1960-2005 – an empirical analysis," MPRA Paper 29846, University Library of Munich, Germany.
    8. Magali Jaoul-Grammare & Isabelle Terraz, 2013. "A Causality Analysis of Economic Growth and Union Density in European Countries," LABOUR, CEIS, vol. 27(4), pages 421-442, December.
    9. John Pencavel, 2009. "How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being," ILR Review, Cornell University, ILR School, vol. 62(2), pages 147-156, January.
    10. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    11. Charles S. Bos & Siem Jan Koopman & Marius Ooms, 2007. "Long memory modelling of inflation with stochastic variance and structural breaks," CREATES Research Papers 2007-44, Department of Economics and Business Economics, Aarhus University.

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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