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Institutions, Incentives and Trade Union Membership

Author

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  • Jaakko Pehkonen
  • Hannu Tanninen

Abstract

The study investigates the determinants of unionization in a country — Finland — where union density, defined as the number of unionized members divided by the labour force, has risen 60 percentage points in 32 years, from 22 percent in 1960 to 82 percent in 1992. The theoretical framework of the study is based on the background information obtained from surveys inquiring why individuals join a union. The empirical analysis for the period 1962–92 shows that the model is capable of explaining long‐run trends in union density in a very satisfactory manner. The results imply that institutional features of the labour market, characterized by the benefit mark‐up variable and a dummy variable capturing labour legislation and public policy toward unionization, play an important role in the development of union density. An interesting policy implication of the study is the prediction that union density would fall considerably if earnings‐related unemployment allowances were to be cut to the level of the basic unemployment allowances.

Suggested Citation

  • Jaakko Pehkonen & Hannu Tanninen, 1997. "Institutions, Incentives and Trade Union Membership," LABOUR, CEIS, vol. 11(3), pages 579-598, November.
    • Handle: RePEc:bla:labour:v:11:y:1997:i:3:p:579-598
    DOI: 10.1111/1467-9914.00051
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    Citations

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    Cited by:

    1. Daniele Checchi & Claudio Lucifora, 2002. "Unions and labour market institutions in Europe [‘Deunionisation, technical change and inequality’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(35), pages 361-408.
    2. Böckerman, Petri & Laaksonen, Seppo & Vainiomäki, Jari, 2006. "Micro-level evidence on wage rigidities in Finland," MPRA Paper 1811, University Library of Munich, Germany.
    3. Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo.
    4. Lewkowicz Jacek & Lewczuk Anna, 2017. "An Institutional Approach to Trade Union Density. The Case of Legal Origins and Political Ideology," Central European Economic Journal, Sciendo, vol. 2(49), pages 35-49, December.
    5. 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.
    6. repec:aia:aiaswp:wp4 is not listed on IDEAS
    7. Daniele Checchi, 2000. "Time series evidence on union densities in European countries," Departmental Working Papers 2000-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    8. repec:zbw:bofrdp:2004_006 is not listed on IDEAS
    9. Erkki Koskela & Roope Uusitalo, 2003. "The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level," CESifo Working Paper Series 878, CESifo.

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