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What Do Employers' Associations Do?

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  • Martins, Pedro S.

    (Nova School of Business and Economics)

Abstract

While trade unions have been studied in detail, there is virtually no economics research on employer associations (EAs), their counterparts in many countries. Here we argue that EAs are important economic agents as they provide sectoral public goods such as collective bargaining, training, and representation. However, their net contributions are complex because of a number of issues, including free riding, firm heterogeneity, and collusion. We then study EAs empirically by comparing sales, employment, productivity, and wages of affiliated and non-affiliated firms. Exploiting changes in firm affiliation status over time in Portugal, we find a positive but small affiliation premium along most dimensions. This premium follows an inverted-U-shaped relationship with EA coverage (defined as the percentage of workers in the relevant industry/region domain employed by affiliated firms). Sectors as a whole also appear to benefit from EA coverage, even if non-affiliated firms do worse.

Suggested Citation

  • Martins, Pedro S., 2020. "What Do Employers' Associations Do?," IZA Discussion Papers 13705, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13705
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    1. John T. Addison & Pedro Portugal & Hugo Vilares, 2017. "Unions and Collective Bargaining in the Wake of the Great Recession: Evidence from Portugal," British Journal of Industrial Relations, London School of Economics, vol. 55(3), pages 551-576, September.
    2. Pedro S. Martins, 2018. "Making their own weather? Estimating employer labour-market power and its wage effects," Working Papers 95, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    3. David K. Levine & Andrea Mattozzi & Salvatore Modica, 2021. "Trade Associations: Why Not Cartels?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(1), pages 47-64, February.
    4. Martins, Pedro S. & Saraiva, Joana, 2020. "Assessing the legal value added of collective bargaining agreements," International Review of Law and Economics, Elsevier, vol. 62(C).
    5. Pedro S. Martins, 2021. "30,000 Minimum Wages: The Economic Effects of Collective Bargaining Extensions," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 335-369, June.
    6. Hijzen Alexander & Martins Pedro S., 2020. "No extension without representation? Evidence from a natural experiment in collective bargaining," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-31, March.
    7. Martin Behrens & Markus Helfen, 2016. "The Foundations of Social Partnership," British Journal of Industrial Relations, London School of Economics, vol. 54(2), pages 334-357, June.
    8. Alan B. Krueger & Orley Ashenfelter, 2022. "Theory and Evidence on Employer Collusion in the Franchise Sector," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 324-348.
    9. Pedro S. Martins, 2020. "Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund," GEE Papers 0152, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2020.
    10. Pedro Silva Martins, 2019. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 591-622, October.
    11. Haucap, Justus & Pauly, Uwe & Wey, Christian, 2001. "Collective wage setting when wages are generally binding An antitrust perspective," International Review of Law and Economics, Elsevier, vol. 21(3), pages 287-307, September.
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    13. Alison J. Kirby, 1988. "Trade Associations as Information Exchange Mechanisms," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 138-146, Spring.
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    15. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
    16. Oliver E. Williamson, 1968. "Wage Rates as a Barrier to Entry: The Pennington Case in Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 82(1), pages 85-116.
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    Cited by:

    1. Kevin Pineda‐Hernández & François Rycx & Mélanie Volral, 2022. "How collective bargaining shapes poverty: New evidence for developed countries," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 895-928, December.
    2. Hijzen Alexander & Martins Pedro S., 2020. "No extension without representation? Evidence from a natural experiment in collective bargaining," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-31, March.
    3. Martins, Pedro S. & Saraiva, Joana, 2020. "Assessing the legal value added of collective bargaining agreements," International Review of Law and Economics, Elsevier, vol. 62(C).
    4. Giannakopoulos, Nicholas & Nicolitsas, Daphne, 2022. "Employers' associations and trade unions: co-existence or more?," GLO Discussion Paper Series 1140, Global Labor Organization (GLO).
    5. Bernardo Fanfani & Claudio Lucifora & Daria Vigani, 2021. "Employer Association in Italy. Trends and Economic Outcomes," DISCE - Working Papers del Dipartimento di Economia e Finanza def109, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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    More about this item

    Keywords

    employer organisations; firm performance; social dialogue; public goods;
    All these keywords.

    JEL classification:

    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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