Working Paper BETA #2017-38

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Title : When union’s activity matters: The impact of union centralization on economic growth in OECD countries

Author(s) : Phu Nguyen-Van, Isabelle Terraz

Abstract : It is nowadays accepted that labor market institutions matter in the economic development. However, empirical studies on unions’ effect are not univocal. Besides traditional indicators of unions’ presence, this paper uses a new indicator to estimate a growth equation using a recent panel dataset on OECD countries. We provide new insight on the impact of unions on the longrun performance of OECD economies. It is shown that a bargaining coverage lower than average and a high degree of union centralization can be harmful to growth. Our study makes the case for new indicators that capture more accurately the bargaining systems.

Key-words : Bargaining indicators, coverage, Economic growth, Union centralization, Wage bargaining.

JEL Classification : J51, O40, O43