Unions and labour market institutions in Europe

TLDR

Unions provide wage‑bargaining power and protection against uninsurable labour‑market risks, functions that labour‑market institutions may also offer. The study examines how union density evolved across 14 European countries after World War II, guided by theoretical rationales for union membership. Job‑security legislation and wage indexation tend to crowd out unions, whereas workplace representation and centralized wage bargaining are linked to higher unionization. Authors: Daniele Checchi and Claudio Lucifora.

Abstract

Union density The economic roles of unions and institutions We study the evolution of union density in 14 European countries over the postwar period in light of theoretical rationales for union membership. Unions offer not only wage bargaining strength, but also protection against uninsurable labour market risks, and similar protection may also be offered by labour market institutions. Empirically, such institutions as job security legislation and wage indexation do appear to crowd out unions. Conversely, institutional features that make it easier for unions to function (such as workplace representation and centralized wage bargaining) are empirically associated with higher unionization. Daniele Checchi and Claudio Lucifora