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Unions and Economic Performance in Developing Countries: Case Studies from Latin America

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  • Fernando Rios-Avila

Abstract

This paper analyzes the economic impact of unions on productivity in the manufacturing sector across six Latin American countries: Argentina, Bolivia, Chile, Mexico, Panama, and Uruguay. Using an augmented Cobb-Douglas production function, the paper finds that unions have positive, but mostly small, effects on productivity, with the exception of Argentina, with a large negative effect, and Bolivia, with no effect. An analysis on profitability shows that, in most cases, the positive productivity effects barely offset higher union compensation, and that unions are negatively related to investment in capital and R and D. Different explanations for these effects are discussed.

Suggested Citation

  • Fernando Rios-Avila, 2014. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," Economics Working Paper Archive wp_787, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_787
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    Cited by:

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    More about this item

    Keywords

    Unions; Productivity; Profitability; Investment; Latin America; Developing Countries;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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