Are Good Industrial Relations Good for the Economy?
Version of Record online: 22 APR 2009
© 2009 The Authors. Journal Compilation © Verein für Socialpolitik and Blackwell Publishing Ltd
German Economic Review
Volume 10, Issue 3, pages 253–269, August 2009
How to Cite
Addison, J. T. and Teixeira, P. (2009), Are Good Industrial Relations Good for the Economy?. German Economic Review, 10: 253–269. doi: 10.1111/j.1468-0475.2009.00461.x
- Issue online: 3 JUL 2009
- Version of Record online: 22 APR 2009
- Cross-country data;
- industrial relations quality;
- labor market institutions;
Abstract. Recent US microeconomic analysis indicates that good industrial relations might improve firm performance. Of late, it has also been claimed that the benefits of industrial relations quality – proxied inversely by a strikes variable – could also extend to the macroeconomy. Using cross-country data, we find that, independent of other labor market institutions, a lower strike volume is associated with lower unemployment. Although there is a separate line of causation running from unemployment to strikes, our analysis suggests that this is not dominant. That said, support for the notion that macro performance owes something to good industrial relations is, however, weakened once we formally control for strike endogeneity.