IDEAS home Printed from
   My bibliography  Save this paper

The Impact of Industrial Relations Legislation on British Union Density


  • Richard Freeman
  • Jeffrey Pelletier


The unionized share of the work force changed markedly in the United Kingdom between the 1970s and 1980s. In the 1970s density rose steadily, making the United Kingdom the most heavily organized large OECD country. In the 1980s, by contrast, density fell by 1.4 percentage points per annum -- a faster drop than in the rapidly de-unionizing U.S. or in Japan. What explains this turnaround - the severe recession of the 1980s? Shifts in the composition of employment from unionized manufacturing to services? The Thatcher government's industrial relations legislation? In this paper we investigate these questions with a quantitative analysis of 1945-1986 changes in British union density. In contrast to studies that concentrate on cyclical determinants of unionism (Bain and Elshiekh, Carruth and Disney, Booth (1983)) we focus on industrial relations legislation. We develop an index of the favorableness of labor laws to unionism and relate it to changes in density in time series regressions that control for inflation, unemployment, and the manufacturing share of employment, among other variables. As a further test, we develop an analogous labor law index for Ireland, whose industrial relations system is similar to the U.K.'s and which experienced a similar severe 1980s recession but which did not pass new laws to weaken unions, and contrast changes in density between the countries with differences in industrial relations law. Our major finding is that the Thatcher government's labor laws caused much of the 1980s fall in British union density. We present the evidence for this claim in three stages. Section 1 lays out the facts of changing union density in the U.K. and Ireland and examines structural explanations of the U.K. changes. Section 2 discusses the 1980s U.K. labor laws and develops an index of their likely impact on unionism. Section 3 presents our econometric analysis of the U.K. time series data.

Suggested Citation

  • Richard Freeman & Jeffrey Pelletier, 1989. "The Impact of Industrial Relations Legislation on British Union Density," NBER Working Papers 3167, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3167
    Note: LS

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Freeman, Richard B, 1988. "Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 63-88, Spring.
    2. Brian Towers, 1989. "Running the Gauntlet: British Trade Unions under Thatcher, 1979–1988," ILR Review, Cornell University, ILR School, vol. 42(2), pages 163-188, January.
    3. Carruth, Alan A & Disney, Richard F, 1988. "Where Have Two Million Trade Union Members Gone?," Economica, London School of Economics and Political Science, vol. 55(217), pages 1-19, February.
    4. Freeman, Richard B, 1986. "The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success," American Economic Review, American Economic Association, vol. 76(2), pages 92-96, May.
    5. Blanchflower, David G & Oswald, Andrew J, 1988. "Profit-Related Pay: Prose Discovered," Economic Journal, Royal Economic Society, vol. 98(392), pages 720-730, September.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3167. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Joanne Lustig). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.