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Union Membership and the Erosion of the Ghent System: Lessons from Finland

Author

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  • Petri Böckerman

    (Palkansaajien tutkimuslaitos)

  • Roope Uusitalo

Abstract

Union density declined in Finland by more than 10 percentage points in less than ten years. This paper analyses the reasons behind the decline, using micro data from the 1990s. According to our results, the changes in the composition of the labour force and the changes in the labour market explain about a quarter of this decline. The main reason for the decline appears to be the erosion of the Ghent system, due to the emergence of an independent UI fund that provides unemployment insurance without requiring union membership. Interestingly, we find evidence that the decline in the union density can be attributed to declining inclination of the cohorts born after the early 1960s to become union members

Suggested Citation

  • Petri Böckerman & Roope Uusitalo, 2005. "Union Membership and the Erosion of the Ghent System: Lessons from Finland," Working Papers 213, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:213
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    References listed on IDEAS

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    1. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084, Elsevier.
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    4. Schnabel, Claus & Wagner, Joachim, 2005. "Determinants of Union Membership in 18 EU Countries : Evidence from Micro Data, 2002/03," Discussion Papers 31, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
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    Cited by:

    1. John Schmitt & Alexandra Mitukiewicz, 2012. "Politics matter: changes in unionisation rates in rich countries, 1960–2010," Industrial Relations Journal, Wiley Blackwell, vol. 43(3), pages 260-280, May.
    2. Markus Leibrecht & Silvia Rocha-Akis, 2014. "Sozialpartnerschaft und makroökonomische Performance," WIFO Studies, WIFO, number 47406.
    3. Pertti Jokivuori, 2006. "Trade union density and unemployment insurance in Finland," Transfer: European Review of Labour and Research, , vol. 12(1), pages 83-87, February.
    4. Anders Kjellberg, 2006. "The Swedish unemployment insurance - will the Ghent system survive?," Transfer: European Review of Labour and Research, , vol. 12(1), pages 87-98, February.
    5. Laust Høgedahl, 2014. "The Ghent effect for whom? Mapping the variations of the Ghent effect across different trade unions in Denmark," Industrial Relations Journal, Wiley Blackwell, vol. 45(6), pages 469-485, November.
    6. Roope Uusitalo & Juhana Vartiainen, 2009. "Finland: Firm Factors in Wages and Wage Changes," NBER Chapters, in: The Structure of Wages: An International Comparison, pages 149-178, National Bureau of Economic Research, Inc.
    7. Christian Dufour & Adelheid Hege, 2010. "The legitimacy of collective actors and trade union renewal," Transfer: European Review of Labour and Research, , vol. 16(3), pages 351-367, August.
    8. Alho, Kari O. E., 2006. "Labour Market Institutions and the Effectiveness of Tax and Benefit Policies in Enchancing Employment: A General Equilibrium Analysis," Discussion Papers 1008, The Research Institute of the Finnish Economy.

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    More about this item

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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