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Union Retreat and Regional Economic Performance: the UK in the 1990s


  • Vassilis Monastiriotis

    (London School of Economics)


This paper uses a panel of regional data to investigate the impact that the well-documented decline in trade unionism in the UK had on the economic performance of its regions. The analysis employed here departs from the traditional firm-level and cross-sectional analyses and looks at the economy-wide effects of unionism. Our findings provide evidence in line with theory that predicts unions to increase wages and reduce labour demand, leading to higher unemployment, but they also indicate that unionism is positively related to productivity and incomes, although in all cases the effects are non-linear. We conclude that unionism is not necessarily a burden for the economy, so long that the beneficial wage/productivity effects overbalance the negative effects on employment.

Suggested Citation

  • Vassilis Monastiriotis, 2003. "Union Retreat and Regional Economic Performance: the UK in the 1990s," Urban/Regional 0302006, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0302006
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    References listed on IDEAS

    1. David Card, 1992. "The Effect of Unions on the Distribution of Wages: Redistribution or Relabelling?," NBER Working Papers 4195, National Bureau of Economic Research, Inc.
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    3. Booth, Alison L, 1991. "Job-Related Formal Training: Who Receives It and What Is It Worth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 281-294, August.
    4. Machin, Stephen J & Wadhwani, Sushil, 1991. "The Effects of Unions on Organisational Change and Employment," Economic Journal, Royal Economic Society, vol. 101(407), pages 835-854, July.
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    6. Miller, Paul & Mulvey, Charles, 1993. "What Do Australians Unions Do?," The Economic Record, The Economic Society of Australia, vol. 69(206), pages 315-342, September.
    7. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
    8. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
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    11. Francis Green & Stephen Machin & David Wilkinson, 1999. "Trade Unions and Training Practices in British Workplaces," ILR Review, Cornell University, ILR School, vol. 52(2), pages 179-195, January.
    12. Booth, Alison L & Chatterji, Monojit, 1998. "Unions and Efficient Training," Economic Journal, Royal Economic Society, vol. 108(447), pages 328-343, March.
    13. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc.
    14. Blackaby, David H & Murphy, Philip D, 1991. "Industry Characteristics and Inter-regional Wage Differences," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(2), pages 142-161, May.
    15. Clark, Kim B, 1984. "Unionization and Firm Performance: The Impact on Profits, Growth, and Productivity," American Economic Review, American Economic Association, vol. 74(5), pages 893-919, December.
    16. Machin, S. & Wadhwani, S., 1989. "The Effects Of Unions On Organizational Change, Investment And Employment: Evidence From Wirs," Papers 355, London School of Economics - Centre for Labour Economics.
    17. Reynolds, Morgan O, 1986. "Trade Unions in the Production Process Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 443-447, April.
    18. David Metcalf, 2001. "British Unions: Dissolution or Resurgence Revisited," CEP Discussion Papers dp0493, Centre for Economic Performance, LSE.
    19. Richard B. Freeman, 1983. "Unionism, Price-Cost Margins, and the Return to Capital," NBER Working Papers 1164, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Philippe Martin, 2005. "The geography of inequalities in Europe," Sciences Po publications info:hdl:2441/9283, Sciences Po.

    More about this item


    trade unions; regional economic performance; panel data;

    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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