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Unions and Collective Bargaining in the Wake of the Great Recession

Listed author(s):
  • Addison, John T.

    ()

    (University of South Carolina)

  • Portugal, Pedro

    ()

    (Banco de Portugal)

  • Vilares, Hugo

    ()

    (Banco de Portugal)

This paper provides the first definitive estimates of union density in Portugal, 2010-2012, using a unique dataset. The determinants of union density at firm level are first modeled. Next, we draw upon a very recent study of the union wage premium to provide summary estimates of the union wage gap for different ranges of union density. Since these estimates fully reflect the reality of an industrial relations system in which collective agreements are extended to nonunion workers and firms, the final issue examined is contract coverage. Although there has occurred a pronounced fall in the number of new extension agreements in recent years, this decline has been uncritically linked with a fall in coverage. We show that the number of workers covered by new and existing agreements has been largely unaffected by economic crisis. The reduced frequency of new agreements and extensions is viewed as an aspect of downward nominal wage rigidity in deflationary times (the counterpart of "upward nominal wage rigidity" in more normal times) rather than the immediate expression of a crisis in collective bargaining per se.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8943.

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Length: 29 pages
Date of creation: Mar 2015
Handle: RePEc:iza:izadps:dp8943
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  1. David S. Lee & Alexandre Mas, 2012. "Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961--1999," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 333-378.
  2. Ana Rute Cardoso & Paulo Guimarães & Pedro Portugal & Pedro S. Raposo, 2016. "The sources of the gender wage gap," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
  3. Carneiro, Anabela & Portugal, Pedro & Varejão, José, 2013. "Catastrophic Job Destruction," IZA Discussion Papers 7670, Institute for the Study of Labor (IZA).
  4. Anabela Carneiro & Paulo Guimaraes & Pedro Portugal, 2009. "Real Wages and the Business Cycle: Accounting for Worker and Firm Heterogeneity," CEF.UP Working Papers 0903, Universidade do Porto, Faculdade de Economia do Porto.
  5. Martins, Pedro S., 2014. "30,000 Minimum Wages: The Economic Effects of Collective Bargaining Extensions," IZA Discussion Papers 8540, Institute for the Study of Labor (IZA).
  6. 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.
  7. Guimaraes, Paulo & Martins, Fernando & Portugal, Pedro, 2017. "Upward Nominal Wage Rigidity," IZA Discussion Papers 10510, Institute for the Study of Labor (IZA).
  8. Anabela Carneiro & Paulo Guimarães & Pedro Portugal, 2012. "Real Wages and the Business Cycle: Accounting for Worker, Firm, and Job Title Heterogeneity," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(2), pages 133-152, April.
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