Working Paper: NBER ID: w10590
Authors: Olivier Blanchard; Thomas Philippon
Abstract: In countries where wages are primarily set by collective bargaining, the effects on unemployment of changes in the economic environment depend crucially on the speed of learning of unions. This speed of learning is likely to depend in turn on the quality of the dialogue that unions have with firms, on what can more generally be called the quality of labor relations. In this paper, we examine the role this quality of labor relations has played in the evolution of unemployment across European countries over the last 30 years. We conclude that it has played an important role: Countries with worse labor relations have experienced higher unemployment. This conclusion remains even after controlling for labor institutions.
Keywords: No keywords provided
JEL Codes: E24; J5; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Quality of dialogue between unions and firms (J58) | Speed of learning of unions (J51) |
| Speed of learning of unions (J51) | Quality of labor relations (J53) |
| Quality of labor relations (J53) | Unemployment rates (J64) |
| Worse labor relations (J59) | Higher unemployment rates (J64) |