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Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data

  • Addison, John T.

    ()

    (University of South Carolina)

  • Teixeira, Paulino

    ()

    (University of Coimbra)

Using international data, we investigate whether the quality of industrial relations matters for the macro economy. We measure industrial relations inversely by strikes – which proxy we cross-check with an industrial relations reputation indicator – and our macro performance outcome is the unemployment rate. Independent of the role of other institutions, good industrial relations do seem to matter: greater strike volume is associated with higher unemployment. Holding country effects constant, however, the sign of the variable is reversed. This fixed-effects result likely picks up a direct effect of strikes, namely, their tendency to rise when striking becomes more attractive to the union.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1968.

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Length: 38 pages
Date of creation: Feb 2006
Date of revision:
Publication status: published as 'Are Good Industrial Relations Good for the Economy?' in: German Economic Review, 2009, 10 (3), 253 - 269
Handle: RePEc:iza:izadps:dp1968
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  4. 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.
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