Trade Union Density and Inflation Performance: Evidence from OECD Panel Data
Article first published online: 28 JUN 2006
Volume 74, Issue 293, pages 135–159, February 2007
How to Cite
BOWDLER, C. and NUNZIATA, L. (2007), Trade Union Density and Inflation Performance: Evidence from OECD Panel Data. Economica, 74: 135–159. doi: 10.1111/j.1468-0335.2006.00532.x
- Issue published online: 12 JAN 2007
- Article first published online: 28 JUN 2006
- Final version received 3 May 2005.
This paper examines the impact of union membership rates on inflation in OECD countries. A positive effect of union density is estimated, even after controlling for fixed effects and time dummies. Additional institutional characteristics, for example union coordination, employment protection laws and central bank independence, do not affect inflation directly in a panel setting, but do influence the size of the unionization coefficient via interaction terms. The results are robust to controlling for potential common causes such as oil price shocks and the political stance of the government, and to using GMM/IV techniques to handle possible endogeneity biases.