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Reforms of Collective Bargaining Institutions in European Union Countries: Bad Timing, Bad Outcomes?

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  • Yann Thommen

Abstract

This paper investigates whether flexibility-enhancing reforms of national collective bargaining systems have positive outcomes in terms of employment and unemployment in the short-term, especially when implemented during an economic downturn. The analysis consists in applying local projections to a novel panel database of reforms of collective bargaining institutions in EU countries in the period 2000-2018. There is no evidence that making collective bargaining institutions more flexible during a recession has a positive effect on employment or unemployment in the short term. More specifically, reforms that reduce bargaining coverage have negative short-term effects, particularly on the employment of young people and low-educated workers, and are associated with a decline in the share of temporary jobs. The results do not support the idea that collective bargaining institutions should be reformed during a recession to boost employment.

Suggested Citation

  • Yann Thommen, 2020. "Reforms of Collective Bargaining Institutions in European Union Countries: Bad Timing, Bad Outcomes?," Working Papers of BETA 2020-47, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  • Handle: RePEc:ulp:sbbeta:2020-47
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    More about this item

    Keywords

    Employment; Unemployment; Short-term effects; Labor market; Collective bargaining; Reforms.;
    All these keywords.

    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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