Economic Factors Affecting the Collective Bargaining Agreement Coverage Rate in Turkey: Cointegration Approach

The right to unionize is now considered as one of the most important indicators of contemporary democracy. Here, unionization rate is defined as the ratio of the number of union members to the total number of employed workers. However, on its own, unionization does not mean anything and it is considered along with the right to collective bargaining. This study used collective bargaining agreement coverage rate data to investigate the effects of economic variables on the collective bargaining agreement coverage rate. It used the share of industrial sector added value in gross domestic product (GDP), per capita income, and inflation as independent variables. The study covered the period of 1988–2022 using the Johansen cointegration and autoregressive distributed lag bound tests. The findings revealed that the variables are cointegrated in the long term. A 1% increase in the share of industrial value added in GDP increases the unionization rate by approximately 3.40%. While a 1% increase in inflation reduces the actual unionization rate by 0.49%, a 1% increase in per capita national income reduces it by approximately 1.18%. Additionally, the study established an error correction model, determining that the deviations experienced in the short term disappear in the long term.