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

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  • Addison, John T.

    () (University of South Carolina)

  • Teixeira, Paulino

    () (University of Coimbra)

Abstract

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.

Suggested Citation

  • Addison, John T. & Teixeira, Paulino, 2006. "Does the Quality of Industrial Relations Matter for the Macro Economy? A Cross-Country Analysis Using Strikes Data," IZA Discussion Papers 1968, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1968
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    References listed on IDEAS

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    More about this item

    Keywords

    quality of labor relations; strike rate/volume; labor market institutions; unemployment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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