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On the Divergence in Unionism among Developed Countries


  • Richard B. Freeman


In this paper I explore the evolution of unionism in the 1970n and 1980s, when the post-oil shock world economy created a "crisis of unionism" throughout the western world. I try to explain why union representation of work forces fell in some countries but not in others and contrast union responses to the challenge of the period. I find that: -- Rates of unionization diverged greatly among developed countries -- The composition of union members shifted from private sector blue collar workers to public sector end white collar workers in all countries, producing increased divisions within union movements by category of worker -- Changes in the industrial composition of employment, changes in public attitudes toward unionism, and the growth of governmental protection of labor do not explain the divergence in density -- Differing rates of inflation contributed to the divergence, with unions doing better in countries with high inflation. In addition, unemployment raised density in settings where unions disperse unemployment benefits -- The primary reason for the divergence are differences in the incentives and opportunities different industrial relations systems give employers to oppose unions. Unions fared best in neo-corporatist settings and worst in settings where decentralized bargaining creates a strong profit incentive for managers to oppose unions and where management is relatively free to act on that incentive -- Union organizations and modes of operating changed significantly in some countries with declining or endangered unionism but not in others Most strikingly, my analysis indicates that if 1980s trends continue the west will be divided between countries with strong trade union movements operating in a neo-corporatist system, as in Scandinavia, and countries with 'ghetto unionism' limited to special segments of the work force, as in the United States.

Suggested Citation

  • Richard B. Freeman, 1989. "On the Divergence in Unionism among Developed Countries," NBER Working Papers 2817, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2817
    Note: LS

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    Cited by:

    1. Joel Rogers, 1995. "United States: Lessons from Abroad and Home," NBER Chapters,in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 375-410 National Bureau of Economic Research, Inc.
    2. Bob Hancké, 1993. "Trade Union Membership in Europe, 1960–1990: Rediscovering Local Unions," British Journal of Industrial Relations, London School of Economics, vol. 31(4), pages 593-613, December.
    3. Henry S. Farber & Alan B. Krueger, 1992. "Union Membership in the United States: The Decline Continues," Working Papers 685, Princeton University, Department of Economics, Industrial Relations Section..
    4. Peter Kenyon & Philip E. T. Lewis, 1993. "Union Membership and the Legal and Institutional Environment: Labour Market Policy in Australia and the United Kingdom," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 26(2), pages 48-60.

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