Negotiating for Social Justice
Edited by Susan Hayter
9. The economic impact of collective bargaining coverage Franz Traxler and Bernd Brandl 9.1 INTRODUCTION Collective bargaining is a cornerstone of industrial democracy. It gives employees a collective voice vis-à-vis the employers who always represent collective entities (that is, the companies). The quantitative importance of collective bargaining, as a means of regulating the employment terms, generally increases with its coverage, that is, the number of employees under its purview. Since employees account for the vast majority of the population, the terms of employment are of macroeconomic relevance and relate to broader developments of economy and society. Hence collective bargaining is not only a matter of industrial democracy, but also of socioeconomic governance. This raises the question of whether and how collective bargaining actually affects the employment terms and other socio-economic conditions, as compared to a situation where collective bargaining is absent. This chapter addresses the question by analysing the economic effects of collective bargaining coverage on the basis of a cross-national comparison of 18 countries for the period from 1980 to 2000. The structure of this chapter is as follows: ● ● ● ● Section 9.2 summarizes the main lines of theoretical reasoning on collective bargaining and economic performance. Section 9.3 describes the hypotheses, the modelling strategy and measures for collective bargaining coverage and bargaining centralization. It gives an overview of the dependent variables, which include three major areas: economic efficiency, (un)employment and the distribution of income. Section 9.4 presents the empirical results on the impact of collective bargaining on economic efficiency,...
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